Characteristics and competition structure of Turkish insurance industry

Abstract

The insurance industry taking place within financial system is affected by national and international economic developments and crises. Furthermore, the natural disasters, experienced in recent years, have also affected the industry in different manners. In addition to them, the competition conditions available at the industry increase the negative effects as well. Within this scope, there has been requirement to examine the competition existing at the industry and observe the change within time.From the point of Turkey, however, new legal arrangements have been made at the Turkish Insurance Industry in addition to natural or economic events, experienced in recent years. It is aimed to indicate the characteristics of the Turkish Insurance Industry and carry out a study on the competition structure of the industry in consideration of economical and natural events, experienced in recent period. The intensity or severity of competition at non-life branches for the period between 2005-2010 is calculated by means of Herfindahl-Hirschman Index. The Index is formed up both for assets and premiums totals. It is observed that the Turkish Insurance Industry is within a competitive structure and competition reflected negatively into the calculation premiums taken and company's profitability in its subsequence. (C) 2012 Published by Elsevier Ltd. Selection and/or peer review under responsibility of Prof. Dr. Huseyin Arasli