Invisible, Visible and 'Direct' Hands: An Institutional Interpretation of Organisational Structure and Change in British General Insurance

This essay uses ideas drawn from institutional and evolutionary economics to explore three different approaches to the organisation of insurance operations in Britain since the eighteenth century: the market-based approach used by Lloyd's; the hierarchical approach developed by insurance companies from the nineteenth century; and the 'direct' approach introduced in the last few years. It argues that these ideas open up the 'black box' of internal operation to economic analysis and relate these to broader strategic change in the business, thus providing a better understanding of its long-term developments by showing how technological innovations have resolved previously intractable difficulties that have channelled the direction of organisational change.