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

Bukvić, Rajko (2022): Concentration in Serbian Insurance Sector: 2011–2020 Changes and Their Decomposition. Published in: Tokovi osiguranja , Vol. 38, No. 1 (2022): pp. 28-49.

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.

• Item Type: MPRA Paper
• Language: English
• Keywords: concentration, competition, insurance, Serbia, indicators, decomposition, market shares, number of companies
• Subjects: C - Mathematical and Quantitative Methods > C3 - Multiple or Simultaneous Equation Models ; Multiple Variables > C38 - Classification Methods ; Cluster Analysis ; Principal Components ; Factor Models; D - Microeconomics > D4 - Market Structure, Pricing, and Design > D43 - Oligopoly and Other Forms of Market Imperfection; G - Financial Economics > G2 - Financial Institutions and Services > G22 - Insurance ; Insurance Companies ; Actuarial Studies; L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L11 - Production, Pricing, and Market Structure ; Size Distribution of Firms; L - Industrial Organization > L8 - Industry Studies: Services > L84 - Personal, Professional, and Business Services

References

Авдашева Светлана Борисовна и Розанова Надежда Михайловна. Теория организации отраслевых рынков, Москва: Издательство Магистр, 1998.

Begović, Boris, Rajko Bukvić, Boško Mijatović, Marko Paunović, Robert Sepi and Dragor Hiber. Antimonopolska politika u SR Jugoslaviji, Belgrade: Center for Liberal-Democratic Studies, 2002.

Bukvić, Rajko M. Dekompozicija promena u koncentraciji u sektoru osiguranja u Srbiji 2011–2020: uticaj promena u strukturi tržišta i broju društava za osiguranje, Ekonomski vidici, 2022, 27(1–2), 35–52.

Bukvić, Rajko M. Novi pristupi ocenjivanju stepena koncentracije i konkurencije: primer sektora osiguranja u Srbiji, XLVIII International Symposium on Operational Research, SYM-OP-IS 2021 Banja Koviljača, 20–23 septembar 2021, Zbornik radova, ur. Dragan Urošević, Milan Dražić, Zorica Stanimirović, Beograd: Univerzitet u Beogradu, Matematički fakultet, 2021, pp. 93–98.

Воробьёв, Павел Фёдорович и Сергей Геннадьевич Светуньков. Новый подход к оценке уровня конкуренции, Современная конкуренция, 2016, 10(6), 5–19.

Смарагдов, Игорь Андреевич и Екатерина Игоревна Нестерова. Структура российского страхового рынка и конкуренция на нём, Концепт, 2015, 4, 1–7.

Смарагдов, Игорь Андреевич и Вера Николаевна Сидорейко. Индексы рыночной концентрации: неоднозначная информативность, Концепт, 2015, 9, 1–8.

Федеральная антимонопольная служба. Об утверждении Порядка проведения анализа состояния конкуренции на товарном рынке (с изменениями на 20 июля 2016 года) от 28 апреля 2010 года N 220, http://docs.cntd.ru/document/902215421

Adelman, Morris Albert. The Measurement of Industrial Concentration, The Review of Economics and Statistics, 1951, 33(4), 269–296.

Bajo, Oscar & Rafael Salas. Inequality foundations of concentration measures: An application to the Hannah-Kay indices, Spanish Economic Review, 2002, 4(4), 311–316.

Bajo-Rubio, Oscar & Rafael Salas. Decomposing Change in Industry Concentration, The Empirical Economics Letters, 2004, 3(6), 311–319.

Bukvić, Rajko. Istraživanja tržišnih struktura u privredi druge Jugoslavije, Ekonomika, 1999, 35(1‒2), 4‒16.

Cowell, Frank A. Measuring Inequality: techniques for the social sciences, New York: Wiley, 1977.

Dimić, Maja. Analiza nivoa koncentracije u bankarskom sektoru i u sektoru osiguranja u zemljama centralne i istočne Evrope, doktorska disertacija, Beograd: Univerzitet Singidunum, 2015.

Encaoua, David and Alexis Jacquemin. Degree of Monopoly, Indices of Concentration and Threat of Entry, International Economic Review, 1980, 21(1), 87–105.

Hannah, Leslie & John A. Kay. Concentration in Modern Industry. Theory, measurement and the U. K. experience, London – Basingstoke: The Macmillan Press Ltd., 1977.

Horizontal Merger Guidelines, U.S. Department of Justice and the Federal Trade Commission, Issued: April 2, 1992, Revised: April 8, 1997. www.justice.gov/atr/public/guidelines/hmg.pdf

Horizontal Merger Guidelines, U.S. Department of Justice and the Federal Trade Commission, Issued: August 19, 2010. www.justice.gov/atr/public/guidelines/hmg-2010.pdf

Kostić, Milan. Analiza koncentracije ponude u sektoru osiguranja Srbije, Industrija, 2009, 37(2), 59–77.

Kostić, Milan; Ljiljana Maksimović, Boban Stojanović. The limitations of competition in the insurance markets of Slovenia, Croatia and Serbia, Economic Research - Ekonomska Istraživanja, 2016, 29(1), 395–418.

Linda, Rémo. Methodology of concentration analysis applied to the study of industries and markets, Commission of the European Communities, Brussels, 1976.

Lončar, Dragan; Aleksandra Đorđević, Milena Lazić, Siniša Milošević, Vesna Rajić. Interplay Between Market Concentration and Competitive Dynamics in the Banking Sector: Evidence from Serbia, Croatia, Romania and the Czech Republic, Ekonomika preduzeća, 2016, 64(5–6), 332–346.

Maksimović, Ljiljana and Milan Kostić. Limitations in the Application of Concentration Indicators, Ekonomika preduzeća, 2012, 60(3–4), 199–205.

Njegomir, Vladimir; Dragan Stojić, Dragan Marković. Liberalisation, Market Concentration and Performance in the Non-Life Insurance Industry of Ex-Yugoslavia, Ekonomska misao i praksa, 2011, 20(1), 21–39.