Network Data Envelopment Analysis in the Insurance Industry: A Literature Review

Data envelopment analysis (DEA) and, more specifically, network DEA (NDEA) has been widely applied over recent decades to evaluate efficiency in the insurance industry. Yet, despite this growing body of work, there is still no coherent and structured overview of which network structures have been adopted, how insurance processes have been modeled via specific indicators, and where the main gaps in current applications lie. The purpose of this study is to provide a comprehensive and systematic mapping of NDEA applications in the insurance sector. Based on a structured search in the Web of Science database, we identify 83 studies that employ network DEA models to evaluate the performance of insurance-related decision making units. Our analysis proceeds in two main stages. First, we conduct a structure-based review in which the network structure used in the literature (two-stage, series, parallel, and mixed structures) are classified under both static and dynamic frameworks. For each study, we document the families of inputs, outputs, intermediate products, and, where applicable, intertemporal link variables (carry-overs) that connect different periods. Second, we carry out a feature-based review that classifies the studies according to geographical region, line of insurance business, type of methodological innovation in the network model, returns-to-scale assumptions, model orientation, and whether or not uncertainty is explicitly incorporated. The results show that static two-stage network structures overwhelmingly dominate the existing literature, whereas dynamic network formulations and variables related to risk, investment activities, and regulatory requirements remain relatively underexplored. On this basis, we identify several research gaps concerning both the choice of network structures and the design of performance indicators, which in turn point to promising directions for future method-ological developments and applications of NDEA in the insurance industry.