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The U.K. With-Profits Life Insurance Industry: A Market Analysis

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  • O'Brien, C. D.

Abstract

This paper reviews the market structure of the U.K. with-profits life insurance market and the potential effect on how life insurers operate. We consider the competitiveness of the market, quantifying the increase in the degree of concentration since 2000, and establishing that inherited estates may offer some protection from competition for incumbent firms. However, there is a significant degree of mobility in market positions of leading firms. Analysis of costs indicates some large differences between firms, with larger firms experiencing lower cost ratios, indicative of economies of scale. There are some marked differences in insurers' prices, the data showing that charges tend to be lower on unit-linked than on with-profits policies. The paper suggests that while there are potential concerns about how the market operates for consumers, the impact is limited by the dramatic reduction in new with-profits business.

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  • O'Brien, C. D., 2009. "The U.K. With-Profits Life Insurance Industry: A Market Analysis," British Actuarial Journal, Cambridge University Press, vol. 15(3), pages 747-777, September.
    • Handle: RePEc:cup:bracjl:v:15:y:2009:i:03:p:747-777_00
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