CONCENTRATION AND MARKET POWER ON THE LIFE AND NON-LIFE INSURANCE MARKET IN THE REPUBLIC OF CROATIA
Published: 9 Apr 2016
Abstract: Market power is a term used for determining the possibility of a company to influence the product price in the market. Depending on the indicators of concentration, we can analyze the level of market concentration. The goal of every company is to achieve the highest possible market power or to have the highest possible market concentration, as this consequently lead to higher profit. Especially interesting market is the insurance market where insurance companies can be divided into life and non-life insurance, which is the methodology of grouping them in this paper. In the Republic of Croatia currently there are 25 insurance companies and 1 reinsurance company. Insurance companies together achieve better results in non-life insurance because non-life insurance is more frequent than life insurance. The reason for this is that life insurance is more influenced by cyclical development comparing to non-life insurance, and there is still a lack of awareness about the importance of life insurance. After entering the European Union, Croatia had to harmonize its legislation with the common EU legislation. Entering EU made liberal the approach for Croatian companies to the EU market, as well as for EU firms to Croatian market. The concentration of the insurance market will be measured by various indicators of market concentration separately for life and non-life insurance, and together for the whole insurance market. Based on we will analyze the market power in the Croatian insurance market.
Keywords: market power, concentration, republic of croatia, oligopolistic market, regression analysis
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