Indian Journal of Economics and Development, July 2019, Vol 7 (7) ISSN (online): 2320-9836 ISSN (Print): 2320-9828 Evaluating the efficiency of leading Indian life insurance companies Shoaib Alam Siddiqui, Dr Stephen Das Joseph School of Business Studies & Commerce, Sam Higginbottom University of Agriculture, Technology and Sciences, Allahabad, India siddiqui.shoaibalam@gmail.com, stephen.das@gmail.com Abstract Objectives: This study is to assess efficiency of leading Indian life insurers using data envelopment analysis (DEA). Methods/Statistical analysis: This study aims to analyze the efficiency performance of top ten Indian life insurers from 2012-2013 to 2016-2017 using data envelopment analysis based on secondary data collected from Insurance Regulatory and Development Authority Annual Reports. Findings: Findings indicate that the state life insurer i.e. Life Insurance Corporation (LIC) has been efficient throughout the study period. Private life insurers are comparatively new in life insurance sector and are of different sizes therefore exhibited variations in their performance levels. Some private life insurers operated efficiently during the study period. Application/Improvements: The study brings into light the operating characteristics and efficiencies of the Indian life insurers during the period 2013-2017 and therefore holds important insights for policy makers, practitioners and the decision makers. Keywords: Non-parametric analysis, Data envelopment analysis, Efficiency analysis, Life insurers, India. 1. Introduction Life insurance companies have been operating in India since pre-independence era. From the year 1928, life assurance company act started collecting business information of all the insurance companies. To safeguard policyholder’s interest, this act was further strengthened and replaced by the Insurance Act. There was fierce competition and malpractices before nationalization of insurance sector. Government of India merged all 154 Indian life insurers, 16 foreign life insurers and 75 provident societies to form Life Insurance Corporation of India (LIC). LIC served the nation and enjoyed monopoly till 1999 [1]. But this measure by the government could not increase insurance penetration and density in India as expected. Therefore, life insurance sector was once again opened for the private life insurers in the year 2000. The life insurance sector is a big one having total twenty four companies and is growing by leaps and bounds [2]. India is second most populous country in the world that means it has one of the largest insurable prospects in the world. India is ranked 10 th among 88 countries for which data is being published. However India’s share in world insurance market was only 2.36% in 2016. This raises questions on the efficiency of this sector. According to an industry report, India’s life insurance premium is expected to grow in the coming years arising mainly from improved efficiency, expanding business in small towns and villages, and overall growth in income per capita [3]. It is expected that the firms will focus more on reducing expenses and policy lapses and increase productivity. Deregulation has created an even playing field for both domestic and foreign affiliated firms in terms of transfer of technology, product development, competitive pricing and services, and professional management. The issue of firm efficiency has a major role in a highly competitive deregulated insurance industry in India. Therefore, the study to evaluate the efficiency of Indian life insurance sector becomes vital to know which life insurers are pulling the sector down and which life insurers are pulling this sector up.