Performance of European insurance firms in the single insurance market

Adnan Kasman and Evrim Turgutlu

International Review of Applied Economics, 2011, vol. 25, issue 3, 363-378

Abstract: The deregulation and liberalization process towards establishing a single European financial market has some important implications for the insurance industries. Due to the increased competition, insurance firms have to adjust their costs and operate efficiently to survive in this new environment. This paper attempts to analyze the cost efficiency and scale economies in the single European insurance market. Considering the ongoing enlargement process of the EU, our sample includes the insurance industries of the major EU-15, four new members and a candidate country, Turkey, over the period 1995-2005. We use the firm-level financial data and estimate a stochastic cost frontier that controls for differences in environmental conditions. All insurance systems display significant levels of cost inefficiency. The results further indicate that there are significant economies of scale, particularly for small- and medium-size insurance firms. Finally, the analyses suggest similar results for major EU countries, new members and the candidate.

Keywords: insurance industry; cost efficiency; single European financial market; CEE countries (search for similar items in EconPapers)
Date: 2011
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://www.tandfonline.com/doi/abs/10.1080/02692171.2010.483470 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:irapec:v:25:y:2011:i:3:p:363-378

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/CIRA20

DOI: 10.1080/02692171.2010.483470

Access Statistics for this article

International Review of Applied Economics is currently edited by Professor Malcolm Sawyer

More articles in International Review of Applied Economics from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().