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Concentration in Serbian Insurance Sector: 2011–2020 Changes and Their Decomposition

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  • Bukvić, Rajko

Abstract

This paper analyses the concentration in the insurance sector and the impact of the market structure (distribution of market shares) and the number of insurance companies on the level of concentration (and competition) in the insurance sector in Serbia (excluding Kosovo and Metohija) in the ten-year period, from 2011 to 2020. The analysis relies upon a stated number of relevant concentration coefficients, based on the total insurance premium, showing a relatively high degree of concentration but without clear fluctuation tendencies. The differentiation of the impact of the mentioned factors was done on the basis of the decomposition of the Hannah-Kay index into two components, figuring the mentioned factors. Decomposition explained most of the degree variations concentration in all observed years (above 87.5%, at a minimum), primarily affected by market structure (changed market share) with a positive, though moderate, correlation; the result was quite different when it came to the number of insurance companies, where divergent and almost completely uncorrelated fluctuations were recorded.

Suggested Citation

  • Bukvić, Rajko, 2022. "Concentration in Serbian Insurance Sector: 2011–2020 Changes and Their Decomposition," MPRA Paper 113386, University Library of Munich, Germany, revised 2022.
    • Handle: RePEc:pra:mprapa:113386
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    File URL: https://mpra.ub.uni-muenchen.de/113386/1/MPRA_paper_113386.pdf
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    References listed on IDEAS

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    1. Oscar Bajo & Rafael Salas, 2002. "Inequality foundations of concentration measures: An application to the Hannah-Kay indices," Spanish Economic Review, Springer;Spanish Economic Association, vol. 4(4), pages 311-316.
    2. Encaoua, David & Jacquemin, Alexis, 1980. "Degree of Monopoly, Indices of Concentration and Threat of Entry," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 21(1), pages 87-105, February.
    3. Leslie Hannah & J. A. Kay, 1977. "The Measurement of Concentration," Palgrave Macmillan Books, in: Concentration in Modern Industry, chapter 4, pages 41-63, Palgrave Macmillan.
    4. Leslie Hannah & J. A. Kay, 1977. "Concentration in Modern Industry," Palgrave Macmillan Books, Palgrave Macmillan, number 978-1-349-02773-6.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    concentration; competition; insurance; Serbia; indicators; decomposition; market shares; number of companies;
    All these keywords.

    JEL classification:

    • C38 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Classification Methdos; Cluster Analysis; Principal Components; Factor Analysis
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L84 - Industrial Organization - - Industry Studies: Services - - - Personal, Professional, and Business Services

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