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Competition in markets for life insurance Author info | Abstract | Publisher info | Download info | Related research | Statistics Marc Pomp
M. Bijlsma
Machiel van Dijk
Michiel van Leuvensteijn ()
C. Zonderland
Additional information is available for the following
registered author(s):
This report presents an empirical analysis of competition in the market for life insurance. In this market, financial advisors play a large role. Therefore, the report devotes considerable attention to the functioning of the market for financial advice. The main findings are as follows. Empirical indicators of competition find only weak competition in the market for life insurance. There are substantial economies of scale, large X-inefficiencies, and limited competition as measured by the Boone-indicator compared to other services sectors. Also, the higher profitability of Dutch life insurers compared to their foreign peers suggests weak competition, although it should be pointed out that this indicator mainly reflects the situation in the past. Better functioning of financial advisors offers a key towards improving competition. Consumers who purchased annuities through advisors are found to achieve lower pay-outs than consumers who purchased directly from life insurers. This finding underlines the importance of more transparency of life insurance products and of independent advice.
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Paper provided by CPB Netherlands Bureau for Economic Policy Analysis in its series CPB Documents with number
96.
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Date of creation: Sep 2005Date of revision:
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Keywords: competition ; life insurance ; financial advice ; Find related papers by JEL classification: L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets D14 - Microeconomics - - Household Behavior - - - Personal Finance
This paper has been announced in the following NEP Reports :
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references Cited by : (explanations , Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile , click on "citations" and make appropriate adjustments.)
Jaap Bikker & Michiel van Leuvensteijn, 2005.
"An Exploration into Competition and Efficiency in the Dutch Life Insurance Industry ,"
DNB Working Papers
047, Netherlands Central Bank, Research Department.
[Downloadable!]
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