Assessing the Technical Efficiency of Traditional and Corporate Agents in Indian Life Insurance Industry: Slack-based Data Envelopment Analysis Approach Ankitha Shetty 1 Savitha Basri 2 Abstract The distribution channels play an imperative role in the life insurance industry. In India, traditional and corporate agency are contributing immensely to the profitability of the insurance companies. The challenges faced by the distributional channels such as high attrition, soaring expense ratio and sales inefficiency have created the need to probe into the efficiency aspects of the channel players. In the absence of such studies in India, this article evaluates the technical efficiency of distribution channels in life insurance industry by analysing the data collected from 12 insurance companies for the period 2012 to 2016. The efficiency scores were obtained by applying data envelopment analysis that considered two inputs (number of agents and commission expenses) and two outputs (average business premium and total policies sold). The findings reveal no significant difference in the efficiency scores of bancassurance and traditional agents. Quiet life hypothesis that market share (ratio of premium contribution to total premium) of distributional channels and their efficiency scores are negatively correlated is not supported. Moreover, the slack analysis shows excess inputs per output generated for both the channels. If the companies that scored low in efficiency do not plug the leakages regarding commission as well a number of agents, adverse performance in the long-term and consequent financial crisis are inevitable. Keywords Bancassurance, traditional agents, insurance companies, cost efficiency, data envelopment analysis Introduction Life insurance business in India has endured cathartic changes over the last 17 years after insurance sector was opened to private and foreign companies (Sinha, 2007, 2015). The recent increase in foreign Global Business Review 21(2) 490–506, 2020 © 2018 IMI Reprints and permissions: in.sagepub.com/ journals-permissions-india DOI: 10.1177/0972150917749722 http://gbr.sagepub.com 1 Assistant Professor, Department of Commerce, Manipal Academy of Higher Education, Manipal. 2 Manipal Institute of Management, Manipal Academy of Higher Education, Manipal, Karnataka, India. Corresponding author: Savitha Basri, Manipal Institute of Management, Manipal Academy of Higher Education, Manipal 576104, Karnataka, India. E-mail: savitha.bs@manipal.edu Article