INTEGRATION WITH THE EUROPEAN FINANCIAL SYSTEM AND CHANGES OF THE NON-LIFE INSURANCE SECTOR CONCENTRATION IN POLAND

Integration of the Polish financial system with European financial markets was not limited solely to the increase of foreign capital, but influenced the manner of its operations, in particular, market structure and level of competition prevailing on it. In the case of non-life insurance sector, at that time, the share of foreign investors in the sector’s primary equity, and their total market share increased. This contributed to lower of the market concentration, and improvement of conditions of the competition. Tests conducted on panel data from 35 companies, including data from non-life insurance and macroeconomic sectors from years 2002 to 2009, indicate that the decrease in market concentration was affected by, among others, the increase in foreign investment in the insurance companies’ equity, increase of the market share of medium-sized firms, the growth in sales through the establishment of banks and other financial institutions and reduction of direct sales by the companies’ establishment. Furthermore, it was found that such changes of concentration were positively impacted by the favorable state of the economy and especially low inflation level.