Journal of risk and insurance,Vol. 84, Issue 2, Pages: 567-597.
The article investigates whether the market concentration is associated with an insurer’s financial stability in the US property-liability insurance industry over the period 1992-2010. We employ two-stage least squares techniques with instrumental variables to address likely endogeneity problems. The results show that higher market concentration is associated with lower financial stability of insurance firms, consistent with the “concentration-fragility” view. Our results indicate that firm-specific characteristics including firm size, …