Data envelopment analysis: efficiency assessment of Islamic life insurance (Takaful) in Indonesia

The growth of sharia financial industry nowadays creates a challenge towards Global Takaful industry. In Indonesia, even though the total asset and insurance premium from Islamic insurance company is continuing to grow, the growth of the sharia insurance activity is separated from the doer itself. The main cause is lack of capital basis supporting for the development of business process and is related to company adaptability toward efficient condition. Therefore, this study tries to analyze the technical efficiency of Islamic life insurance companies in Indonesia by using Data Envelopment Analysis (DEA) with a BCC model through orientation input production approaching during period 2009-2012. The result shows that the insurance company by the form of sharia unit has a high efficient level, instead of full fledge sharia insurance company. It indicates that none of economical scope and economical scale occurs within sharia insurance industry