The influence of Macroeconomic and Institutional factors on the Structure of the Country’s Insurance Industry: The case of I.R. of Iran and some other Selected Countries

To identify factors influencing the insurance industry, could set a foundation to increase its efficiency as well as effectiveness. In this respect, macroeconomic and Institutional factors are capable of having a very effective role. By identifying such factors and making the appropriate policies, it is expected that preliminaries to the industry’s growth and advancement are established. The influence and importance of Macroeconomic and Institutional factors on the structure of the I.R. of Iran Insurance Industry and some other selected nations for the 2002-2010 time interval is studied in this research. Reviewing the literature and taking the basic theories into the consideration, some indicators like the economic freedom, the governance indicator, natural logarithm of GDP per capita, and the economic growth present the basis of the studyto evaluate the institutions’ performance under the generalized least squares estimator in addition to the integrated panel data model. The results indicate that the natural logarithm of GDP per capita as a proxy for development of institutions negatively affects the concentration ratio of the insurance industry at a significant level.  Moreover, economic freedom as another institution factor was proved to have a significantly negative effect on the concentration ratio of the insurance industry. Components of the governance index however, were not observed to have the same impact on the concentration with the study case. Both the regulatory quality, and the rule of law show a negative and statistically significant effect on the concentration ratio.While the level of accountability,voice,and corruption control provided positive effect on the concentration ratio, but the level of the political stability, and the level of government effectiveness did not present any significant impact on the concentration ratio.