Concentration in Serbian Insurance Sector: 2011–2020 Changes and Their Decomposition

This paper analyses the concentration in the insurance sector and the impact of the market structure (distribution of market shares) and the number of insurance companies on the level of concentration (and competition) in the insurance sector in Serbia (excluding Kosovo and Metohija) in the ten-year period, from 2011 to 2020. The analysis relies upon a stated number of relevant concentration coefficients, based on the total insurance premium, showing a relatively high degree of concentration but without clear fluctuation tendencies. The differentiation of the impact of the mentioned factors was done on the basis of the decomposition of the Hannah-Kay index into two components, figuring the mentioned factors. Decomposition explained most of the degree variations concentration in all observed years (above 87.5%, at a minimum), primarily affected by market structure (changed market share) with a positive, though moderate, correlation; the result was quite different when it came to the number of insurance companies, where divergent and almost completely uncorrelated fluctuations were recorded