Structural Analysis of Nonlife Insurance Efficiency in Croatia

The main goal of the research is to analyze the efficiency of non-life insurance in Croatia using the DEA method. The paper focuses on analyzing efficiency by types of non-life insurance to determine efficiencies by insurance types, identify areas for improvement, and optimize the Croatian insurance market. Past research has analyzed the overall efficiency of non-life insurance and the efficiency of individual insurance companies in the Republic of Croatia. This paper focuses on evaluating efficiency by specific types of insurance within the non-life insurance category. The methodological framework is based on the application of the input-oriented CCR and BCC models, which enable the assessment of relative efficiency. A dynamic analysis was conducted using acquisition costs, administrative costs, and settled claims as input variables, and earned premium as the output variable. The analysis reveals significant variations in efficiency by types of non-life insurance. The BCC model, considering variable returns, consistently provides higher efficiency values compared to the CCR model, highlighting the importance of scale effects in non-life insurance. The comprehensive analysis provides insight into the dynamics of efficiency in the Croatian non-life insurance market. The analysis results show that efficiency levels vary significantly among different types of insurance, with economies of scale significantly impacting efficiency. These research results offer new scientific evidence for optimizing market efficiency and strengthening competitiveness in the Croatian insurance industry. The results contribute to the theoretical understanding of the dynamics of the non-life insurance market and offer new implications for the development of the insurance market.