Productivity changes of insurers : Metafrontier Malmquist productivity index and a bootstrapping approach

Insurance penetration rate in Malaysia is low at only between 40% and 50%. Following the government’s policy goal of increasing the rate, this study examined metafrontier Malmquist productivity index (MMPI) and drivers of the MMPI among Malaysian insurers. Over the 2009–2017 period, general insurers and life insurers were technology leaders. General insurers had progressive productivity (MMPI) on average, whereas the MMPI values of the life and general insurers and life insurers were in deterioration. Overall, long-term strategic planning and capital investment alongside government’s liberalization to increase competition in the industry are thus necessary.