A Multi-product Cost Study of the U.S. Life Insurance Industry.

This paper reports estimates of overall and product specific economies of scale, as well as, economies of scope for the main outputs of the life insurance industry. In addition, the paper presents a number of structural tests of the production technology. The results indicate that the estimated cost function satisfies the regularity conditions, that the industry exhibits overall and product specific economies of scale, and that there are significant economies of scope between the main lines of business. Copyright 2003 by Kluwer Academic Publishers