Competition reduces profitability: the case of the Indian life microinsurance industry

Savitha, B and Banerjee, Subrato (2021) Competition reduces profitability: the case of the Indian life microinsurance industry. Geneva Papers on Risk and Insurance: Issues and Practice, 46. pp. 383-398. ISSN 10185895

[img] PDF
DisplayPdf.pdf
Restricted to Registered users only

Download (715kB) | Request a copy

Abstract

We aim to understand the effect of market and frm-level concentration on return on equity in the Indian life microinsurance industry (LMI). This research is one of the frst attempts to empirically test structure–performance issues in India. Using data on 14 companies that remained active in the LMI market during 2009–2019, we demonstrate that frms in the Indian LMI market scored better on proftability measures whenever competitive pressures were lower. We calculate Herfndahl– Hirschman concentration indexes (HHI), market share and entropy measures and use panel data techniques to fnd a positive efect of concentration and a negative efect of market share. We conclude that LMI-specialised insurers in India perform better than diversifed insurers.

Item Type: Article
Uncontrolled Keywords: Concentration · Competition · Life microinsurance · Market share · Return on equity · Profitability
Subjects: Management > MIM Manipal
Depositing User: MIM User
Date Deposited: 15 Sep 2021 05:08
Last Modified: 15 Sep 2021 05:08
URI: http://eprints.manipal.edu/id/eprint/157384

Actions (login required)

View Item View Item