2005 Fiscal Year Final Research Report Summary
Empirical analysis of Japanese non-life insurance firms : the impact of auto insurance upon the Performance of the firms
| Project/Area Number |
16530273
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| Research Category |
Grant-in-Aid for Scientific Research (C)
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| Allocation Type | Single-year Grants |
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| Section | 一般 |
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| Research Field |
Business administration
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| Research Institution | Kyoto Sangyo University |
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Principal Investigator |
MIYASHITA Hiroshi Kyoto Sangyo University, Faculty of Business Administration, Professor, 経営学部, 教授 (80166173)
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| Co-Investigator(Kenkyū-buntansha) |
YONEYAMA Takau Hitotsubashi University, Graduate College of Commerce, Professor, 商学研究科, 教授 (00175019)
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| Project Period (FY) |
2004 – 2005
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| Keywords | non-life insurance firm / econometric analysis / panel data / cost inefficiency / auto insurance |
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| Research Abstract |
We collected panel data of the Japanese non-life insurance forms from 1970 to 2003. These firms consist of Tokyo Kaijyou, Sonpo Japan, Mitsui Sumitomo, Nihon Koua, Aioi Sonpo, Nisshin Kasai, Nichidou Kasai, Fuji Kasai, Kyouei Kasai, Asahi Kasai and Nissei Douwa. For each firm, the following variables were computed.
Proportion of auto insurance = Revenue from auto insurance/total revenue
Auto insurance share = Revenue from auto insurance for the firm/Total revenue from auto insurance of 11 firms
Price of auto insurance = Revenue from auto insurance/No of auto insurance policies
Capital cost, labor cost and agency cost are the three major costs on the non-life insurance firms. We used a Seemingly-unrelated regression model, which consists of a translog cost function and three cost-share equations. Cost efficiency was captured by the coefficients of the dummy variables. The computed inefficiencies were transformed into ranks which varies from 1(lowest cost inefficiency) to 12(highest inefficiency).
A limited-dependent variable model was introduced to manipulate these rand data. We used an ordered-probability model to Evaluate the impact of explanatory variables upon the inefficiency ranks. These explanatory variables are the three variables concerning auto insurance shown above and several others.
From the result of the estimation of the ordered-probability model, we observed that the three variables of auto insurance have an significant effect upon the ranks which measure cost inefficiency. Thus, we concluded that auto insurance has major impact upon the performance of the Japanese non-life insurance firms.
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Research Products
(2 results)
