The Analysis of Competitiveness in Iran's Insurance Industry Using the Panzar-Rosse Model

Document Type : Research Paper

Authors

1 General Insurance Group, Insurance Research Center, Tehran, Iran

2 Faculty of Management, Kharazmi University, Tehran, Iran

3 Department of Insurance, Banking and Customs Management, Faculty of Management, Kharazmi University, Tehran, Iran

Abstract

In recent years, insurance industry has undergone profound changes that have changed the performance of this industry. Establishment of a significant number of private insurance companies and their entry into the competition scene, on the one hand, has reduced the concentration of the market in this industry, and on the other hand, the introduction of new technologies in recent years has created space for competition and forced companies to increase their efficiency. Considering the importance of competition in an industry as well as knowledge of its situation for policymaking, this study examines the competitiveness of Iranian private insurance companies admitted to the stock market, from 2013 to 2021 using Panzar-Rosse non-structural method in the form of panel data. The result of estimated model indicates the state of monopoly competition in the market for Iranian private insurance companies admitted to the Stock Exchange. Comparing the results of this study with previous studies, the assumption of improving competitiveness in the Iranian insurance industry is confirmed by increasing the number of private insurance companies as well as the rating of produced insurance premium in the world. The insurance industry has no barriers to the market entry, and the participation of large insurance companies (except Iran Insurance Company) in the market does not restrict competition significantly and, as a result, the assumption of a dominant firm is rejected. In addition, insurance companies have moved to specialized activity and focus on specific insurance to maintain survival and competition in the market

Keywords

Main Subjects

References

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Journal of Economic Research (Tahghighat- E- Eghtesadi)
Volume 59, Issue 2
November 2024
Pages 204-230

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History

  • Receive Date: 27 May 2023
  • Revise Date: 26 February 2024
  • Accept Date: 12 November 2024

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