Comparison of Efficiency Levels of Turkish Insurance Companies with VZA Malmquist Total Factor Efficiency Analysis

Any change in the efficiency of insurance companies has a direct impact on financial markets and economic development. In this study, the development of the efficiency of the companies in the insurance sector traded on Stock Exchange Market Istanbul in the period of 2016–2020 is examined. Efficiency values were calculated using the Data Envelopment Analysis (DEA) method. The change in efficiency values during the period was measured using the Malmquist Total Factor Productivity Index. As a result of the analysis, it was determined that three companies out of the six companies included in the study were operating effectively in all periods. To be effective, inefficient businesses need to reduce their inputs and outputs. When we examine the average efficiency values of the periods, 2019 was more efficient for the insurance industry than other years. According to the total factor productivity index, the insurance industry showed an average annual productivity increase of 5.6% in 2016–2020. This increase in productivity in the sector resulted from technological progress. The findings show that most insurance companies are growing steadily. This chapter will contribute to policymakers and insurance institutions taking appropriate steps to develop relevant policies to increase the efficiency of insurance institutions in Turkey.