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Measuring the Concentration of Insurance sector – the Case of Southeastern European Countries

Author

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  • Dimić Maja

    (University Union Nikola Tesla, Faculty of Business Studies and Law, Staro sajmište 29, 11000Belgrade, Serbia)

  • Barjaktarović Lidija

    (University Singidunum, Faculty of Business Belgrade, 32 Danijelova St., Belgrade, Serbia)

  • Arsenijević Olja

    (University Union Nikola Tesla, Faculty of Business Studies and Law, Staro sajmište 29, 11000Belgrade, Serbia)

  • Šprajc Polona

    (University of Maribor, Faculty of Organizational Science, Kidriceva cesta 55a, 4000Kranj, Slovenia)

  • Žirovnik Janez

    (University of Maribor, Faculty of Organizational Science, Kidriceva cesta 55a, 4000Kranj, Slovenia)

Abstract

Background and purpose: The goal of the paper is to determine the level of concentration in the insurance sector in the following eight countries of South and Eastern Europe: Serbia, Croatia, Bosnia and Herzegovina, Montenegro, Former Yugoslav Republic of Macedonia, Romania, Bulgaria and Albania in the period from 2007 to 2012.Design/Methodology/Approach: In this context, the analysed indicators of concentration were the market share of the four leading financial institutions (CR4), the Herfindahl-Hirschman Index (HHI), the coefficient of entropy (E), the coefficient of relative entropy (RE) and Gini coefficient (G).Results: The study showed that the insurance sectors in the analysed countries are highly concentrated on average (according to CR4 indicator), medium concentrated (according to HHI) with high levels of inequality of distribution of market shares between individual participants (in terms of G coefficient), and in the zone of relative uniformity and equality of business entities (according to RE coefficient). The research results point out that the existence of different levels of correlation between the analysed indicators of concentration in the insurance sector, which confirms the conclusion that, in order to obtain relevant and quality conclusions about the level of concentration, it is necessary to review and analyse several indicators of concentration integrally.Conclusion: In all observed indicators of concentration in relation with the density level GDP pc move in the zone of very low value, which on the one hand points to the fact that the analysed countries at a relatively similar level of development have significantly different levels of concentration, but also on the fact that some countries although at different levels of development, have similar levels of concentration.

Suggested Citation

  • Dimić Maja & Barjaktarović Lidija & Arsenijević Olja & Šprajc Polona & Žirovnik Janez, 2018. "Measuring the Concentration of Insurance sector – the Case of Southeastern European Countries," Organizacija, Sciendo, vol. 51(1), pages 50-64, February.
    • Handle: RePEc:vrs:organi:v:51:y:2018:i:1:p:50-64:n:4
    DOI: 10.2478/orga-2018-0004
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    References listed on IDEAS

    as
    1. Luigi Zingales & Raghuram G. Rajan, 2003. "Banks and Markets: The Changing Character of European Finance," NBER Working Papers 9595, National Bureau of Economic Research, Inc.
    2. Paul M. Sweezy, 1939. "Demand Under Conditions of Oligopoly," Journal of Political Economy, University of Chicago Press, vol. 47(4), pages 568-568.
    3. Athanasoglou, Panayiotis & Delis, Manthos & Staikouras, Christos, 2006. "Determinants Of Bank Profitability In The South Eastern European Region," MPRA Paper 10274, University Library of Munich, Germany.
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