The Impact of Bancassurance on the Performance and Efficiency of Life Insurance Companies

Abstract

This study investigates the evolution of bancassurance in Egypt, specifically examining the impact of regulatory frameworks on the performance and technical efficiency of the Misr Insurance Holding Company (MIHC). The research analyzes two pivotal eras: the "experimental" phase (2004-2013), marked by regulatory instability, and the "reactivation" phase (2014-2020), following the strategic 2013 decree by the Central Bank of Egypt (CBE) and the Financial Regulatory Authority (FRA). The methodology employs a three-tiered quantitative approach. First, descriptive statistics and Independent Samples T-tests reveal a dramatic surge in performance during the reactivation phase: average Return on Investment (ROI) rose from 3.5% to 19.04%, and Distributable Profit to Equity increased from 3.1% to 29.43%. Second, an Interrupted Time Series Analysis (ITSA) was utilized to assess the causal impact of the 2013 intervention, identifying a positive immediate level shift in performance indicators (β2 = 0.1744 for ROI). Third, a non-parametric Data Envelopment Analysis (DEA) under Variable Returns to Scale (VRS) was applied to evaluate technical efficiency. Empirical results from the DEA model indicate a profound structural transformation; while the experimental phase exhibited high volatility and technical slack, with efficiency scores as low as 0.080, the post-2013 era achieved a stabilized and superior efficiency profile, reaching the "efficiency frontier" (score of 1.000) in the majority of the observed years. Furthermore, administrative expenses were successfully optimized, dropping from a peak of 326% of premiums in 2004 to a stable average of 14.13% after the reactivation. The study concludes that regulatory stability is the primary driver of operational maturity and resource optimization in the Egyptian life insurance sector, providing a roadmap for future bank-insurance integration.