Comparative Analysis of Concentration in Insurance Markets in New EU Member States

Authors: T. Pavic Kramaric, M. Kitic

Abstract:

The purpose of this article is to analyze the market structure as well as the degree of concentration in insurance markets in new EU member states. The analysis was conducted using several most commonly used concentration indicators such as concentration ratio, Herfindahl-Hirschman index and entropy index. These indicators were calculated for the 2000-2010 period on the basis of total gross written premium as the most relevant indicator of market power in insurance markets. The results of the analysis showed that in all observed countries the level of concentration decreased, though with significantly different intensity. Yet, in some countries, the level of concentration remains very high.

Keywords: insurance market, concentration, new EU member states

Digital Object Identifier (DOI): doi.org/10.5281/zenodo.1328688

References:

[1] CEA Statistics No44, European Insurance in Figures, December 2011
[2] Jedlicka, L. and Jumah, A.,The Austrian Insurance Industry: A Structure, Conduct and Performance Analysis, Economics Series, Institute for Advanced Studies, Vienna, 2006, pp 1-38
[3] Samuelson, W. F. and Marks, S. G., Managerial Economics, Fifth Edition, John Wiley&Sons, Inc., 2006.
[4] Griffiths, A. and Wall, S., Applied Economics, 9th Edition, Financial Times/Prentice Hall, 2001.
[5] Horizontal Merger Guidelines, 2010, U.S. Department of Justice and the Federal Trade Commission, http://www.justice.gov/atr/public/guidelines/hmg-2010.html (18/03/2012)
[6] Shepherd, W. G. and Shepherd, J. M., The Economics of Industrial Organization, Waveland Press, Illinois, 2000.
[7] Bikker, J. A. and Haaf, K., Measures of competition and concentration in the banking industry: a review of the literature, Research Series Supervision no. 27, De Nederlandsche Bank, September 2000, pp 1-35
[8] Financial Supervision Commission of Bulgaria, http://www.fsc.bg/Statistics-en-154
[9] Czech Insurance Association, http://www.cap.cz/ItemF.aspx?list=DOKUMENTY_02&view=pro+web +pravideln%c3%a9+%c4%8dtvrtletn%c3%ad+statistiky+EN
[10] Estonian Financial Supervision, http://www.fi.ee/index.php?id=3273
[11] Hungarian Insurance Bureau, http://www.mabisz.hu/en/marketreports. html
[12] Polish Financial Supervision Authority, http://www.knf.gov.pl/en/about_the_market/Insurance/Publications/pub lications.html
[13] Romanian Insurance Supervisory Commission http://www.csaisc. ro/index.php?option=com_content&view=article&id=70&Itemid=77 &lang=en
[14] Slovenian Insurance Supervision Agency, http://www.azn. si/Eng/Default.aspx?id=2
[15] Ministry of Finance of the Slovak Republic, http://www.nbs.sk/DFT/POIST/SPRAVY/2000_2.PDF (May, 2005).