The Market Structure Performance Relationship in the International Insurance Sector

20 Pages Posted: 7 Nov 2008

See all articles by Nat Pope

Nat Pope

Bradley University - Department of Finance

Yu-Luen Ma

Illinois State University - Katie Insurance School

Abstract

This article tests the applicability of the structure-conduct-performance (SCP) hypothesis in the international nonlife insurance marketplace. We employ a panel data regression methodology that includes 23 nations (developed and developing countries) over the time period of 1996 to 2003. The results reveal that the interaction of market liberalization and market concentration shares a complex relationship with market profitability. Our results show that the expectations associated with the SCP hypothesis are supported when the levels of liberalization are low. However, for markets that are highly liberalized the presence of foreign insurers significantly alters the dynamics of nonlife insurance markets.

Suggested Citation

Pope, Nat and Ma, Yu-Luen, The Market Structure Performance Relationship in the International Insurance Sector. Journal of Risk & Insurance, Vol. 75, Issue 4, pp. 947-966, December 2008, Available at SSRN: https://ssrn.com/abstract=1296892 or http://dx.doi.org/10.1111/j.1539-6975.2008.00292.x

Nat Pope (Contact Author)

Bradley University - Department of Finance ( email )

1501 West Bradley Avenue
Peoria, IL 61625
United States

Yu-Luen Ma

Illinois State University - Katie Insurance School ( email )

Normal, IL 61790
United States

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