汽车专业毕业设计 翻译 中英文全competition and regulation in the korean automobile insurance induWord文档格式.docx

汽车专业毕业设计 翻译 中英文全competition and regulation in the korean automobile insurance induWord文档格式.docx

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Briefhistory

InKoreaatrueautomobileinsurancebusinesshasbegunwiththeestablishmentofKoreaAutomobileInsuranceCompany（KAIC）in1962,whichwasfundedby10incumbentpropertyandliabilityinsurancecompanies.Before1962Koreanpropertyandliabilityinsurancecompanies’operationhadbeenconfinedmainlytofireandmarineinsurance,eventhoughtheyhadlicensestosellautomobileinsurance.Theythoughtautomobileinsurancewasveryriskyandunprofitablebusinesssincethemarketwasverysmallwithabout30,000carsinthecountryandtherewasnoaccumulateddataforrate-making.

However,growingpublicconcernsaboutautomobileaccidentvictimsforcedpropertyandliabilityinsurancecompaniestomakeaninsurancepooltoprovideautomobileinsurancecoverageonavoluntarybasis.Theoutcomewasaninsurancepool,socalledKAIC,whichwasconvertedtoastockcompanyin1968.In1963followingyearoftheestablishment,bodilyinjuryliabilitywithapolicylimitbecamecompulsorybythelaw.Since1963,withrisingautomobileusage,theautomobileinsurancehasbecomeincreasinglyimportantinKoreanpropertyandliabilityinsuranceindustry.Till1997,whenthelong-terminsuranceovertook,theautomobileinsurancehadbeenthelargestpartoftheKoreanpropertyandliabilityinsuranceindustry.<

Figure1>

showsthepremiumdistributionbylinesofpropertyandliabilityinsurancefrom1963to2005.

Since1962,theautomobileinsuranceindustryhadbeenmonopolizedbyonecompanyunderastronggovernmentcontroluntiltheindustrywasopenedto13propertyandliabilityinsurancecompaniesincluding2foreigncompaniesin1983.Evenafterbeingseeminglytheopenmarket,theautomobileinsuranceindustryhadbeenheavilyregulated.Allcompanieswererequiredtousegovernment-authorizedpremiumrates,providingthesameproductsatthesameprice.TherehadbeennopricecompetitionintheKoreanautomobileinsuranceindustry.Newentriestothemarketwerevirtuallyprohibitedbythevagueprovision,socalled‘EconomicNeedTest’,bywhichthegovernmenthasthesolepowertogivealicensetoselltheautomobileinsurance.

However,theregulatoryenvironmentwasdrasticallychangingwiththe1996affiliationwithOECD（OrganizationforEconomicCooperationandDevelopment）andthe1997financialcrisis.ByOECD,asaquasi-regulator,andIMF,asacreditor,theKoreangovernmentwasstronglyadvisedor/andrequiredtoremovegovernmentcontrolsoverthefinancialactivities.Deregulationbyexternalforceswasdirectedtoanopencompetition.Oneoftwomajorchangesinregulationwastoremovean‘EconomicNeedTest’fromalicenserule.Nowanybodycandoaninsurancebusinessifclearlyspecifiedentryconditionsaremet.Secondly,pricecompetitionhasstartedsinceAugust,2000whenanexpenseloadingofgrosspremiumwasliberalized.Oneyearlatertheexpectedclaimscost,purepremium,canbedeterminedbyanindividualcompanybasedonitsownlossexperiences.

<

Table1:

RecentStatusoftheKoreanAutomobileInsuranceMarket>

2000

2001

2002

2003

2004

2005

#ofregisteredcars（1,000）

（growthrate）

12,210

（8.1%）

13,181

（8.0%）

14,211

（7.8%）

14,677

（3.3%）

14,990

（2.1%）

15,537

（3.6%）

PremiumsWritten（bil.KRW）

6,487

（17.3%）

7,321

（12.9%）

7,895

7,942

（0.6%）

8,506

（7.1%）

8,781

（3.2%）

NumberofFirms,EntryandMarketconcentration

In1983whentheautomobileinsurancemarketwasshiftedtoacompetitivemarketfromthemonopoly,13propertyandliabilityinsurancecompaniesincluding2foreigncompaniestookpartinthemarket.Alldomesticcompanieswerestockcompanies.ThereisnomutualcompanyintheKoreaninsurancemarket.Until1999whenoneforeigncompanywithdrewanautomobileinsuranceline,therehadbeennochangeinthenumberoffirmsintheautomobileinsuranceindustry.Inyear2000onedomesticcompanywentintobankruptcy.Only11companiesstartedyear2001.

In2001thefirstautomobilemono-lineinsurancecompanyenteredthemarketaftertheentryregulationwaschanged.Twomoremono-linecompaniesjoinedtheautomobileinsuranceindustryin2003.Mono-linecompaniesattackedthemarketwithlowerpricesbyusingtele-marketingandinternetmarketingchannels.Withtheadventofmono-linecompanies,realpricecompetitionstartedintheKoreanautomobileinsurancemarket.AsofMarch,2006,14outof28propertyandliabilityinsurancecompaniessellautomobileinsuranceinKorea.

Table2:

MarketConcentrationinAutomobileInsuranceIndustry>

FiscalYear

No.ofFirms

CR1

CR4

HHI

1962-1982

1

100%

-

10,000

1983

13

89.7%

94.7%

8059

1984

59.6%

75.4%

3725

1985

45.1%

67.2%

2358

1986

35.2%

63.3%

1704

1987

27.5%

60.6%

1349

1988

22.4%

58.8%

1196

1989

19.9%

59.2%

1171

1990

19.3%

59.4%

1180

1991

18.2%

58.3%

1160

1992

16.8%

57.7%

1135

1993

16.1%

57.0%

1120

1994

15.9%

57.5%

1125

1995

60.3%

1189

1996

23.4%

64.1%

1307

1997

25.9%

66.5%

1398

1998

27.9%

66.8%

1460

1999

28.2%

68.7%

1496

12

29.3%

70.1%

1560

31.3%

72.3%

1692

30.8%

70.5%

1630

14

30.0%

68.8%

1562

29.6%

68.5%

1532

28.0%

68.3%

1467

*KoreaFairTradeCommissionconsidersamarketconcentratedifCR1

0.5andCR3

0.75.

**TheHorizontalMergerGuidelinesissuedbytheUSDepartmentofJusticeandtheFederalTradeCommissionclassifymarketsasunder:

0<

HHI<

1000,notconcentrated,1000<

1800,moderatelyconcentrated,and1800<

HHI,concentrated.

Scaleeconomies

Thereisabigrangeinthesize（intermsofpremiumswrittenaswellasassets）ofinsurancecompaniessellingautomobileinsuranceinKorea.Thereare4companieswithtotalannualpremiumsofover1trillionKRWand10companieswithlessthan1trillionKRW.Theso-called“Big4”companiesaccountforabout70%ofthemarket.Usuallyitisofinteresttoaskwhetherornotthelargercompanieshaveacostadvantageoverthesmallercompanies.Substantialcostadvantagescouldindicatebarrierstoentryandthepossibilitythatlargecompaniescouldsetpricessubstantiallyabovemarginalcostwithoutprovokingcompetitiveentry.However,itishardtoexpectthatkindofpricingbehaviorsincetherewasnopricecompetitioninthemarketbeforeyear2000whenthetariffsystemwaspartiallylifted.

Ifthereareeconomiesof