The study is on assessment of the allocative efficiency and hence evaluating the interplay between the level at which quoted insurance companies in Nigeria economically employ and utilize available resources and the overall performance in term of profitability, turnover and return on investment. The study adopted an input orientated DEA methodology to assess the allocative efficiency of quoted insurance companies in Nigeria under the assumption of variable return to scale. Four input variables: management expenses, net premium, shareholders’ fund and total assets and four output variables: investment income, net claims, and profit after tax and market share return on equity, were used for the assessment. The result revealed a high degree of input slacks of input variables in twenty-three insurance companies. This means that there was excess input that was not properly allocated to produce the necessary output. The result also revealed output fall, which occurred in twenty-three companies. This output fall would not have occurred, if the input variables had been properly allocated. It was discovered that the majority of insurance firms in Nigeria, especially small-scale ones, continue to operate inefficiently in terms of allocation and utilization of resources
Keywords: allocative efficiency; management expenses; net premium; shareholders’ fund; total assets;
