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ISSN : 2288-4637(Print)
ISSN : 2288-4645(Online)
The Journal of Asian Finance, Economics and Business Vol.6 No.1 pp.241-248

How Productive Are Life Insurance Institutions in Malaysia? A Malmquist Approach

Muhammad Mehedi Masud1, Md. Sohel Rana2, Md Aslam Mia3, Md. Khaled Saifullah4
* The authors would like to acknowledge the Centre for Poverty and Development Studies, (CPDS), University of Malaya, for funding of this work (PD001-2017).
2 Ph.D Researcher, Faculty of Business and Accountancy, University of Malaya, Malaysia. E-mail:
3 Senior Lecturer, School of Management, University Sains Malaysia, USM 11800, Penang, Malaysia. Email:
4 Learning Specialist, USAID's Advancing Universal Health Coverage (AUHC), Chemonics International Inc., Dhaka, Bangladesh. E-mail:
1 First Author and Corresponding Author. Senior Lecturer, Department of Development Studies, Faculty of Economics and Administration, University of Malaya, Malaysia [Postal Address: 50603 Kuala-Lumpur, Malaysia]. Tel: +603-7967-3630, E-mail:
September 15, 2018 October 1, 2018 December 20, 2018


The purpose of this study is to investigate empirical evidences of productivity of life insurance institutions in Malaysia. Therefore, this study attempts to explore the productivity of the life insurance institutions in Malaysia. The overall findings show that the total factor productivity (TFP) has progressed by 2.5% per year during the study period from 2012 to 2016 in the Malaysian insurance industry. However, TFP change has declined from 2012 to 2015 and observed a negative growth in 2015-16 (3.3%). The highest productivity progress was documented during 2012-13 at a rate of 11.7% while the minimum productivity progress was during 2014-15 (only 0.2%). The results also indicate that the decomposition of TFP found that overall progress could mainly be attributed to technological change (TC). However, technical efficiency change (TEC) and pure technical efficiency change (PTE) have negative impact on TFP. The findings also show that most of the insurance companies have a steady growth. Therefore, this study will contribute new insights for the policy makers and insurance institutions to take appropriate steps in developing relevant policies for increasing productivity of insurance institutions in Malaysia.

JEL Classification Code: D21, D24, L23.






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