Abstract: The purpose of this study is to measure the technical efficiency of Jordanian insurance companies using data envelopment analysis. The period of the study (2000-2006) is the duration of observed improvements in this sector. The importance of this study is that it will give attention to what extent technical efficiency will support the companies overall goal and how Amman Stock Exchange (ASE) values such efficiency. The sample consists of 22 insurance companies listed in ASE. The inputs variables used to measure efficiency are technical reserves, equity, borrowings and operating expenses, whereas the outputs include premium and investment income. The results reveal that insurers’ efficiency is increased over the study period, and ASE values the technical efficiency of insurance companies by appreciating their stock prices.
Keywords: Technical Efficiency, Insurance, DEA, Amman Stock Exchange
