Comparative analysis of DEA/AHP and DEA/Fuzzy AHP Models in Evaluating the Effeciency of Life Insurance and Takaful Companies / Nur Shuhada Mohamad, Nurul Fatinah Ahmad Padzil and Norhafizah Zakiah Hashim

The purpose of this research is to evaluate efficiency of life insurance and Takaful
companies in Malaysia by comparing the efficiency result based on integrating of
Data Envelopment Analysis (DEA) with Analytic Hierarchy Process (AHP) and Data
Envelopment Analysis (DEA) with Fuzzy Analytic Hierarchy Process (F AHP) during
the period 2015-2017. The output-input data consist of 19 life insurance and Takaful
companies in Malaysia were chosen as the sample of the study. This research develops
the output orientation CCR model to measure the efficiency. This study utilizes two
inputs and two outputs; commission expenses and management expenses as well as
net premium and net investment income. The secondary data has been collected from
each company's annual financial report respectively. This paper has compared the
three models which are DEA, DEA/Fuzzy AHP and DEA/AHP. The result showed
that DEA model produces many efficient units and many zero weights for three
consecutive years. Then, by integrating Fuzzy AHP and AHP into DEA the number of
efficient units has been reduced. Besides that, by using the DEA/Fuzzy AHP model
the number of zero weights has been reduced. While by using DEA/ AHP model, the
number of zero weights has been eliminated. It shows that the discrimination power
has been increased when expert judgement being considered.