engleski

Changes in degree of industrial concentration in the Croatian insurance industry

The basic characteristic of insurance industry used to be a small number of insurance companies, which could make above-average profits and maintain the leading position in the market by taking advantage of the existing regulations. However, the emergence of market economy changes the situation in that industry - the almost monopolistic market structure is now transformed into tight oligopoly. Aiming to investigate the structural changes in the insurance industry we chose the usual ways of determining the distribution of market share among the companies in that industry. Accordingly, the basic indicators of industrial concentration were used such as: concentration ratios, Herfindahl-Hirschman index, Lorenz curve, Gini coefficient, and entropy index. Considering the fact that the Croatian insurance industry currently consists of a large number of insurance companies (25), we could, without any additional analyses, think that the industry in question is a low-concentrated one. However, the results are contrary to this belief. The analysis of the trends in the basic indicators of industrial concentration for the period of 1996-2003 shows the diminishing market share of the leading insurance company as well as a declining market concentration level in general. As the observed industry is characterised by one dominant company (with a market share larger than 40%), a few medium sized companies, and about twenty companies with their individual market shares lower than 3%, it is to be concluded that the insurance market in Croatia is still highly concentrated. In such circumstances the issue should be the consequences of the decreasing market concentration and particularly its influence on the development of economies in transition.

Croatian insurance industry; industrial concentration

U Knjizi proširenih sazetaka rad je na str. 363-365.