Abstract
This study analyzes concentration effects of merger and acquisition in the Taiwan property-liability insurance industry. The correlation between market structure and underwriting performance are analyzed from 2000 to 2006 through testing structure conduct performance (SCP) hypothesis and relative market power (RMP) hypothesis. The SCP hypothesis anticipated that concentration is positively related to performance while the RMP hypothesis asserts that market share is positively related to performance. The numerical analysis shows that the SCP hypothesis holds for the Taiwan property-liability insurance industry while the RMP hypothesis is not confirmed. Concentration is positively related to underwriting performance with p-value of 0.4%. Higher concentration and positive concentration-performance correlation infer that the merger and acquisition activities have positive effects on firm performance.
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