THE INFLUENCE OF MARKET CONCENTRATION ON THE PROFITABILITY OF INSURANCE COMPANIES IN THE REPUBLIC OF CROATIA

The financial sector in the Republic of Croatia in the last two decades has been significantly impacted by deep, unprecedented changes. Multiple system transformations and the high level of financial innovation has reflected on the changes of the market structure - by ensuring higher value for shares held by larger companies, thereby ensuring higher profits, which is based on the so-called SCP paradigm. The main goal of this study is to investigate the connection between the degree of industrial concentration and the profitability of insurance companies quoted at the financial market in the Republic of Croatia. In other words, the goal is to determine the level to which the degree of industrial concentration affects the profitability of life and non-life insurance companies, for which purpose a nine-year period was analysed, from 2009 to 2017. The results of the study indicate a moderate degree of concentration, which continues the years-long trend of consolidation on the insurance market.