DEA EVALUATIONS OF THE EFFICIENCY OF ORGANIZATIONAL FORMS AND DISTRIBUTION-SYSTEMS IN THE US PROPERTY AND LIABILITY INSURANCE INDUSTRY

The efficiency effects of different forms of ownership (stock versus m utual) and types of mai marketing system (agency vel sus direct) are s tudied using 1989 data for the US property-liability insurance industr y. Data envelopment analysis (DEA) results are obtained from the recen tly developed RAM (Range Adjusted Measure) model and then extended for comparison with studies by others. Using agency theory (and like appr oaches) these studies assume that operations all occur only on the eff iciently frontier. The need for that assumption is obviated by using o perations provided by DEA to project all observations onto their effic ient frontiers. A use of (non-parametric) rank-order statistics then p roduces results which differ from these other studies.