A Multi-Product Cost Study of the US Life Insurance Industry

• Main Author: SEGAL, Dan
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2003
• Subjects: life insurance; insurance industry; cost function; economies of scale; economies of scope; Accounting; Corporate Finance; Insurance
• Online Access: https://ink.library.smu.edu.sg/soa_research/811; http://dx.doi.org/10.1023/A:1023098109619
• Institution: Singapore Management University

This paper reports estimates of overall and product specific economies of scale, as well as, economies of scope for the main outputs of the life insurance industry. In addition, the paper presents a number of structural tests of the production technology. The results indicate that the estimated cost function satisfies the regularity conditions, that the industry exhibits overall and product specific economies of scale, and that there are significant economies of scope between the main lines of business.