Intellectual capital based performance improvement, study in insurance firms

Abstract

Purpose – Intangible resources are the most distinctive firms’ assets in competitive environments especially in service businesses. Insurance firms seeking more efficient performance than competitors should improve their intellectual capital (IC) strategies in both aspects of IC creation and utilization. The purpose of this paper is to investigate and improves IC participation in insurance firms’ efficiency. Design/methodology/approach – A two-phase framework: “explaining IC role in efficiency” and “measuring efficiencies of IC creation and application” is developed in order to find IC strategies increasing firms’ efficiency and though competitiveness. Efficiency is measured using data envelopment analysis and the generalized estimating equations is used as the regression method in order to explain efficiency with IC measures. Findings – Empirical results in Iran insurance sector (during a seven-year period for 17 Iranian insurers) show some IC components influence firms’ efficiency and could be intervention points for performance improvement. Then the firms are categorized into four zones in terms of IC efficiency and strategies are recognized for each category. Research limitations/implications – Although the research is initiated by the need to embed intangible resources in performance improvement in insurance sector, the research framework could be strongly applied in other knowledge-based industries. Originality/value – This paper embeds an innovative link between classic efficiency and IC which aligns resource management with competitiveness strategies.