Insurers : Too Many, Too Few, or "Just Right"? Initial Observations on a Cross-Country Dataset of Concentration and Competition Measures
In many markets, industry and policymakers agree that there may be too many insurers. In others, the consensus is that there could be benefit from more competition. But this broad consensus is often supported by evidence that is more qualitative, a...
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| Language: | English |
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World Bank, Washington, DC
2012
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| Online Access: | http://documents.worldbank.org/curated/en/2008/03/9251341/insurers-too-many-too-few-or-just-right-initial-observations-cross-country-dataset-concentration-competition-measures http://hdl.handle.net/10986/6510 |
| Summary: | In many markets, industry and
policymakers agree that there may be too many insurers. In
others, the consensus is that there could be benefit from
more competition. But this broad consensus is often
supported by evidence that is more qualitative, anecdotal,
or judgmental despite being unanimous. What is less clear,
however, is how far consolidation or liberalization will go,
how fast, and when it will end. This paper presents some
initial observations from a cross-country data set and
proposes that individual country results can be interpreted
against this data set to inform expectations regarding
trends in competition, concentration and consolidation, to
inform analysis of the sector, for individual firm strategic
planning and wider market risk assessments. A "natural
level" for measures is suggested as a starting
hypothesis. Further consideration is then made of the role
of absolute market size, stage of market development, and
differentials between life and non life segments. Analysis
of the natural level, adjusted for market conditions, can
then be used to develop preliminary views on current and
expected market dynamics, strategic planning, and to inform
policy, regulatory and supervisory priorities. |
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