During the past three decades, significant changes
have taken place in the insurance market of Serbia. Th e
passing of the Law on Property and Personal Insurance
from 1996 laid the foundations for the development
of the insurance market, and the insurance laws from
2004 and 2014 brought the functioning of this market
closer to European standards.
Th e paper analyzes the period between 2005 to 2021.
Th ere was a significant growth of the insurance market
at this time. Th e premium per capita at the beginning
of the period amounted to 55 euros, while in 2021 it
reached 136 euros per capita. Also, during the observed
period, the number of foreign-owned insurance
companies increased. According to National Bank of
Serbia data, out of 19 insurance companies in 2005,
5 were majority foreign-owned. By 2010, 19 out of 26
insurance companies were majority foreign-owned,
and in 2021, 15 out of 20 companies were majority
foreign-owned. Th e share of majority foreign-owned
insurance companies in the total insurance premium in
2005 was 16%. In the same year, the share of foreign owned
insurance companies in life insurance premiums
was 71%, while the non-life share was only 6%. By
2021, majority foreign-owned insurance companies
participated with 73.4% in the total premium, 87.1%
in the life insurance premium and 60% in the non-life
insurance premium.
Th e paper also analyzes the degree of concentration
in the insurance sector between 2005 and 2021.
During this period, there were significant changes in
the insurance market. Based on the obtained results,
it is possible to divide the observed period into two
parts, before and aft er 2010. By analyzing the obtained
results, which are presented in the second part of the
paper, it can be seen that due to the changes there was
a decrease in market concentration in the period from
2005 to 2010. At the beginning of this period, according
to the value of the index, the market was classified as
a highly concentrated market. Also, the results of the
GRS concentration index, which proved to be the
most accurate measure of concentration, indicate that
there was a drop in concentration in this period. Th e
value of this index in 2005 was 0.335, while in 2010
the it was 0.259. Th e results are similar if life or nonlife
insurance is considered. During this period, one
large state insurance company, DDOR, was privatized
and a significant number of foreign-owned insurance
companies entered the market. After 2010, a slight decrease in market concentration occurred. The results
of the index in this period indicate that the changes are
mainly the result of changes in the market structure, i.e.
market shares of insurance companies operating on the
market of the Republic of Serbia.
Although there was a decline in market
concentration in the observed period, along with
the process of market liberalization it is necessary to
adopt appropriate regulations that will influence the
strengthening of competition in the insurance market
in the future. Strengthening of legal regulation and
supervision of insurance is necessary in order to avoid
unfavorable market situations and improve the position
of consumers.
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