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The strategic role of reinsurance in the United Kingdom’s (UK) non-life insurance market / Vineet Upreti; Mike Adams

Journal of Banking & Finance, Volume: 61, Pages: 206 - 219

Swansea University Author: Upreti, Vineet

DOI (Published version): 10.1016/j.jbankfin.2015.09.010

Abstract

We demonstrate that by increasing the level of reinsurance, primary insurers increase their product-market share at the expense of rivals with lower reinsurance coverage in five main lines of insurance in the United Kingdom’s (UK) non-life insurance market. We use panel data drawn from statutory fil...

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Published in: Journal of Banking & Finance
Published: 2015
URI: https://cronfa.swan.ac.uk/Record/cronfa23363
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Abstract: We demonstrate that by increasing the level of reinsurance, primary insurers increase their product-market share at the expense of rivals with lower reinsurance coverage in five main lines of insurance in the United Kingdom’s (UK) non-life insurance market. We use panel data drawn from statutory filings made by non-life insurers to the then UK regulator (FSA) over 1985 to 2010 period. We find that the influence of reinsurance and other financial variables on insurers’ growth in product-market share varies across lines of insurance business. Since reinsurance impacts on product-market outcomes in competitive non-life insurance industry, we conclude that reinsurance performs an important strategic function in insurance markets.
Keywords: Reinsurance; Insurance; Strategy; United Kingdom
College: School of Management
Start Page: 206
End Page: 219