Abstract:
This study examined total factor productivity change of Insurance Industry in Sri Lanka. For
this study, a total premium of insurance companies was chosen to as an output variable, while
total assets and shareholders fund were chosen as input variables. Input-output data of 18
insurance companies were collected in Sri Lanka over the study period 2010-2015. The study
applied methods of Malmquist Productivity Index (MPI) based on Data Envelopment Analysis
(DEA) to measure the total factor productivity growth (TFPG). The Malmquist Productivity
Index (MPI) decomposes total factor productivity growth into technical efficiency change and
technological change. The results of this study indicate that total factor productivity of insurance
industry decreased over the period of study in Sri Lanka. Five among the insurance companies
had progressive productivity growth and the rest of the insurance companies had regressive
productivity growth in Sri Lanka.
