engleski

Changes of Market Structure and Competition in the Croatian (Non)Life Insurance Industry

Until the nineties of the last century, the Croatian insurance market used to be highly concentrated. However, with the entrance of foreign capital and private investors, market structure and level of competition significantly changed. From former almost monopolistic situation with only one (or a few) state owned insurance companies operating on it, insurance market has developed into more competitive structure – oligopoly. The purpose of this article is to analyze the degree of competition and market structure as well as to determine whether the presence of dominant company is still one of the (non)life insurance market characteristics. In order to determine the degree of competition and the concentration level (as a basic indicator of market structure) the concentration ratios, Herfindahl-Hirschman index and entropy index were computed separately for the life and non-life insurance industry for the period from 1998 till 2010. The results reveal that Croatian non-life insurance market is highly concentrated and characterized by the presence of “tight oligopoly“ and dominant firm existence. However, moderate to low concentration and the presence of “loose oligopoly“ is detected on the life insurance segment.

market structure ; competition ; (non)life Insurance

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