Market Structure, Efficiency, and Performance of Jordan Insurance Market

Mutasem Jaloudi; Amir Bakir

doi:doi:10.11648/j.ijber.20190801.12

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Market Structure, Efficiency, and Performance of Jordan Insurance Market

Mutasem Jaloudi, Amir Bakir

Published in International Journal of Business and Economics Research (Volume 8, Issue 1)

Received: 19 December 2018 Accepted: 10 January 2019 Published: 28 January 2019

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Abstract

This study aims to investigate the impact of the market share, according to the SCP hypothesis, technical efficiency, according to the ES hypothesis, and other control variables on the performance of insurance companies in Jordan. The study used panel data for 22 insurance companies operating in Jordan during 2000-2016. The authors used the Herfindahl-Hirschman Index (HHI) and the concentration ratio (CR) to evaluate the Market structure of the insurance sector, Also employed market share as a proxy of the SCP hypothesis while efficiency score estimated using the DEA technique to proxy for the ES hypothesis, control variables were (Reinsurance, leverage, and Underwriting risk), while the dependent variable, performance was measured as return on assets. The model estimated using Random Effect GLS. The study found that the insurance market in Jordan is highly concentrated, where a few insurers control a large market share of premiums. Also, the result supports the (SCP) hypothesis for the insurance market in Jordan, and Reinsurance, leverage, and Underwriting Risk have a negative relationship with ROA. This is the first study -to the best author’s knowledge - to test SCP and ES hypothesis in the insurance sector in Jordan.

Published in	International Journal of Business and Economics Research (Volume 8, Issue 1)
DOI	10.11648/j.ijber.20190801.12
Page(s)	6-13
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2019. Published by Science Publishing Group

Keywords

Insurance, DEA, Structure-Conduct-Performance, Efficient Structure, Performance, Jordan

References

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APA Style

Mutasem Jaloudi, Amir Bakir. (2019). Market Structure, Efficiency, and Performance of Jordan Insurance Market. International Journal of Business and Economics Research, 8(1), 6-13. https://doi.org/10.11648/j.ijber.20190801.12

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ACS Style

Mutasem Jaloudi; Amir Bakir. Market Structure, Efficiency, and Performance of Jordan Insurance Market. Int. J. Bus. Econ. Res. 2019, 8(1), 6-13. doi: 10.11648/j.ijber.20190801.12

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AMA Style

Mutasem Jaloudi, Amir Bakir. Market Structure, Efficiency, and Performance of Jordan Insurance Market. Int J Bus Econ Res. 2019;8(1):6-13. doi: 10.11648/j.ijber.20190801.12

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@article{10.11648/j.ijber.20190801.12,
  author = {Mutasem Jaloudi and Amir Bakir},
  title = {Market Structure, Efficiency, and Performance of Jordan Insurance Market},
  journal = {International Journal of Business and Economics Research},
  volume = {8},
  number = {1},
  pages = {6-13},
  doi = {10.11648/j.ijber.20190801.12},
  url = {https://doi.org/10.11648/j.ijber.20190801.12},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijber.20190801.12},
  abstract = {This study aims to investigate the impact of the market share, according to the SCP hypothesis, technical efficiency, according to the ES hypothesis, and other control variables on the performance of insurance companies in Jordan. The study used panel data for 22 insurance companies operating in Jordan during 2000-2016. The authors used the Herfindahl-Hirschman Index (HHI) and the concentration ratio (CR) to evaluate the Market structure of the insurance sector, Also employed market share as a proxy of the SCP hypothesis while efficiency score estimated using the DEA technique to proxy for the ES hypothesis, control variables were (Reinsurance, leverage, and Underwriting risk), while the dependent variable, performance was measured as return on assets. The model estimated using Random Effect GLS. The study found that the insurance market in Jordan is highly concentrated, where a few insurers control a large market share of premiums. Also, the result supports the (SCP) hypothesis for the insurance market in Jordan, and Reinsurance, leverage, and Underwriting Risk have a negative relationship with ROA. This is the first study -to the best author’s knowledge - to test SCP and ES hypothesis in the insurance sector in Jordan.},
 year = {2019}
}

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TY  - JOUR
T1  - Market Structure, Efficiency, and Performance of Jordan Insurance Market
AU  - Mutasem Jaloudi
AU  - Amir Bakir
Y1  - 2019/01/28
PY  - 2019
N1  - https://doi.org/10.11648/j.ijber.20190801.12
DO  - 10.11648/j.ijber.20190801.12
T2  - International Journal of Business and Economics Research
JF  - International Journal of Business and Economics Research
JO  - International Journal of Business and Economics Research
SP  - 6
EP  - 13
PB  - Science Publishing Group
SN  - 2328-756X
UR  - https://doi.org/10.11648/j.ijber.20190801.12
AB  - This study aims to investigate the impact of the market share, according to the SCP hypothesis, technical efficiency, according to the ES hypothesis, and other control variables on the performance of insurance companies in Jordan. The study used panel data for 22 insurance companies operating in Jordan during 2000-2016. The authors used the Herfindahl-Hirschman Index (HHI) and the concentration ratio (CR) to evaluate the Market structure of the insurance sector, Also employed market share as a proxy of the SCP hypothesis while efficiency score estimated using the DEA technique to proxy for the ES hypothesis, control variables were (Reinsurance, leverage, and Underwriting risk), while the dependent variable, performance was measured as return on assets. The model estimated using Random Effect GLS. The study found that the insurance market in Jordan is highly concentrated, where a few insurers control a large market share of premiums. Also, the result supports the (SCP) hypothesis for the insurance market in Jordan, and Reinsurance, leverage, and Underwriting Risk have a negative relationship with ROA. This is the first study -to the best author’s knowledge - to test SCP and ES hypothesis in the insurance sector in Jordan.
VL  - 8
IS  - 1
ER  -

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Author Information

Mutasem Jaloudi

Insurance Directorate, Ministry of Industry, Trade, and Supply, Amman, Jordan
Amir Bakir

Department of Business Economics, School of Business, University of Jordan, Amman, Jordan

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APA Style

Mutasem Jaloudi, Amir Bakir. (2019). Market Structure, Efficiency, and Performance of Jordan Insurance Market. International Journal of Business and Economics Research, 8(1), 6-13. https://doi.org/10.11648/j.ijber.20190801.12

Copy | Download

ACS Style

Mutasem Jaloudi; Amir Bakir. Market Structure, Efficiency, and Performance of Jordan Insurance Market. Int. J. Bus. Econ. Res. 2019, 8(1), 6-13. doi: 10.11648/j.ijber.20190801.12

Copy | Download

AMA Style

Mutasem Jaloudi, Amir Bakir. Market Structure, Efficiency, and Performance of Jordan Insurance Market. Int J Bus Econ Res. 2019;8(1):6-13. doi: 10.11648/j.ijber.20190801.12

Copy | Download

@article{10.11648/j.ijber.20190801.12,
  author = {Mutasem Jaloudi and Amir Bakir},
  title = {Market Structure, Efficiency, and Performance of Jordan Insurance Market},
  journal = {International Journal of Business and Economics Research},
  volume = {8},
  number = {1},
  pages = {6-13},
  doi = {10.11648/j.ijber.20190801.12},
  url = {https://doi.org/10.11648/j.ijber.20190801.12},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijber.20190801.12},
  abstract = {This study aims to investigate the impact of the market share, according to the SCP hypothesis, technical efficiency, according to the ES hypothesis, and other control variables on the performance of insurance companies in Jordan. The study used panel data for 22 insurance companies operating in Jordan during 2000-2016. The authors used the Herfindahl-Hirschman Index (HHI) and the concentration ratio (CR) to evaluate the Market structure of the insurance sector, Also employed market share as a proxy of the SCP hypothesis while efficiency score estimated using the DEA technique to proxy for the ES hypothesis, control variables were (Reinsurance, leverage, and Underwriting risk), while the dependent variable, performance was measured as return on assets. The model estimated using Random Effect GLS. The study found that the insurance market in Jordan is highly concentrated, where a few insurers control a large market share of premiums. Also, the result supports the (SCP) hypothesis for the insurance market in Jordan, and Reinsurance, leverage, and Underwriting Risk have a negative relationship with ROA. This is the first study -to the best author’s knowledge - to test SCP and ES hypothesis in the insurance sector in Jordan.},
 year = {2019}
}

Copy | Download

TY  - JOUR
T1  - Market Structure, Efficiency, and Performance of Jordan Insurance Market
AU  - Mutasem Jaloudi
AU  - Amir Bakir
Y1  - 2019/01/28
PY  - 2019
N1  - https://doi.org/10.11648/j.ijber.20190801.12
DO  - 10.11648/j.ijber.20190801.12
T2  - International Journal of Business and Economics Research
JF  - International Journal of Business and Economics Research
JO  - International Journal of Business and Economics Research
SP  - 6
EP  - 13
PB  - Science Publishing Group
SN  - 2328-756X
UR  - https://doi.org/10.11648/j.ijber.20190801.12
AB  - This study aims to investigate the impact of the market share, according to the SCP hypothesis, technical efficiency, according to the ES hypothesis, and other control variables on the performance of insurance companies in Jordan. The study used panel data for 22 insurance companies operating in Jordan during 2000-2016. The authors used the Herfindahl-Hirschman Index (HHI) and the concentration ratio (CR) to evaluate the Market structure of the insurance sector, Also employed market share as a proxy of the SCP hypothesis while efficiency score estimated using the DEA technique to proxy for the ES hypothesis, control variables were (Reinsurance, leverage, and Underwriting risk), while the dependent variable, performance was measured as return on assets. The model estimated using Random Effect GLS. The study found that the insurance market in Jordan is highly concentrated, where a few insurers control a large market share of premiums. Also, the result supports the (SCP) hypothesis for the insurance market in Jordan, and Reinsurance, leverage, and Underwriting Risk have a negative relationship with ROA. This is the first study -to the best author’s knowledge - to test SCP and ES hypothesis in the insurance sector in Jordan.
VL  - 8
IS  - 1
ER  -

Copy | Download