Concentration in the U.K. Ordinary Life Assurance Market

Abstract

Studies of market concentration have been generally restricted to the manufacturing and distributive industries, with little attention paid to the markets in which financial companies operate,' but it is the purpose of this study to deal with one such market-the market for life assurance. With progressively closer regulation of insurance business has come an increasing wealth of published statistics relating to the whole industry, and, while it is not suggested that the extent or form of the published data is now wholly satisfactory, they do provide a useful source of basic industry-wide data for a study such as this. The scope of this study will be limited to the ordinary life assurance market,2 and it will be substantially based on the statistics published by the Department of Trade and Industry [6], which is the agency responsible for regulating the conduct of insurance business in the U.K. However, due to the long delays which have recently arisen in the publication of these statistics, an attempt will be made to present a more up-to-date picture by making use of slightly less comprehensive data for 1972. Section I will consider the need for study of concentration in life assurance, while section II will review the existing studies. Section III discusses various aspects of concentration in the life assurance market, and section IV presents the empirical results of this study. Section V contains the conclusions.