Please use this identifier to cite or link to this item:
Title: Factors Affecting Concentration Ratio in Non-life Insurance Business
Authors: Sukratanawong, Walee 
Issue Date: 1992
Publisher: University of the Thai Chamber of Commerce
Source: Walee Sukratanawong (1992) Factors Affecting Concentration Ratio in Non-life Insurance Business.
Abstract: The major objective of this thesis is the analysis of the concentration ratio in the non-life insurance sector. Factors affecting concentration in non-life insurance will also be studied. Chapter 1 emphasizes the role of the non-life insurance sector and the study of factors affecting the concentration ratio. Methodology and the usefulness of this study are also given attention in this section. Chapter 2 looks at the history of non-life insurance in Thailand. Included are factors governing the structure of the market,as well as government authority imposed on this business. Chapter 3 the concentration method,in particular the Absolute Concentration Ratio and the Herfindahl Index, was applied to the problems of concentration in non-life insurance in Thailand. Additionally, this chapter introduces the statistical method used to calculate the equation showing the factors affecting the concentration ratio. In the case of this study,a regression analysis has been employed. Chapter 4 the results of the study reveal the nature of the relationship between the concentration ratio and the relevant factors. The study itself imposes economics theory and the principles of applied statistics on the facts.That is,the equations are built on historical data,each following specific objectives.The statistical test mentioned in chapter 3 is a simple equation adding one variable at a time.It demonstrates an increasing relationship between the concentration ratio and variable factors. Chapter 5 presents the summary of results and recommendation. This study uses secondary data from the Insurance Department, General Insurance Association, Bank of Thailand, Thai Farmers Bank and other sources over the period 1982-1991. Secondary data from this period is used because it is readily available and has more accuracy. The calculations are based on estimated values. The variances should be minimized and the standard coefficient, the result is more significant and vice versa if the variance becomes larger. To set up the hypothesis using F-test values, all coefficients of independent variables equal zero. With regard to the acceptability of the hypothesis, if all coefficients are not equal, t-test value will be considered by referring to the coefficient of determination or R2. If the value of R2 is high, then the dependent variable. This effects still unexplained in that equation are only minor. The analysis of concentration using the Absolute concentration ratio shows that Non-life Insurance Business is concentrated among ten dominant firms, who share more than 50% of the total market leaving the remainder divided among the other 51 companies. Using the Herfindahl index, the calculated value of Herfindahl was greater than the minimum value of Herfindahl for the non-life insurance industry. This gives an indication of the concentration in the large companies. In other words,the value of Herfindahl calculated for the large companies was greater than that for the mid-sized and small companies when using the minimum value of Herfindahl for the non-life insurance sector as a benchmark. The factors with the greatest impact on concentration in the case of the 10 dominant firms in the study, in order from greatest to least,are bank loans,number of homes,per capita income and the value of exports. The part of the study focusing on lines of business such as fire insurance shows that the major impacting factors, in order, are bank loans,number of agents and the number of homes. The four factors affecting the concentration ratio in marine and transportation insurance are bank loans, value of import, number of agents and value of exports. With motor insurance, the only two impacting factors, in order, are capita income and the number of agents.Miscellaneous insurance is affected, in order, by number of homes, per capita income and bank loans. The study also shows that the companies studied are affected by funds, assets and advertising, in order, The study also proposes guidelines for the solving of the problem of concentration in a few companies in the non-life insurance sector. This involves merging smaller cpmpanies to increase their market potential.
Rights: This work is protected by copyright. Reproduction or distribution of the work in any format is prohibited without written permission of the copyright owner.
Appears in Collections:GS: Theses / Independent Studies

Files in This Item:
File Description SizeFormat 
1263fulltext.pdf3.93 MBAdobe PDFThumbnail
Show full item record Recommend this item

Google ScholarTM


Items in DSpace are protected by copyright, with all rights reserved, unless otherwise indicated.