Efficiency, competition, and the development of life insurance in France (1870-1939): Or: should we trust pension funds?
French life insurance remained underdeveloped in comparison with other countries during a long period between 1870 and 1939. We show that technical peculiarities of the contracts used and their interaction with macroeconomic fluctuations explain the wide fluctuations we observe in insurance operations. In an industry where the accumulation both of long-lived contracts and reputation is central, it is likely that these fluctuations may have slowed the enlargement of the client population and the increase in managed assets ; nevertheless, we suggest they are not sufficient to explain their long term stagnation. Low returns paid to clients, resulting from very conservative investment strategies, were the main reason for that stagnation, since only those interested by the life-cycle related aspects of insurance contracts continued to put money in these institutions, with most savers investing directly in the market or through State-owned financial institutions. The main reason for such an investment (and then low-growth) strategy is the existence of a set of conservative regulations and a stable oligopoly in the industry from the 1880s onwards. We suggest that established insurance companies were able to impose regulations and barriers to entry blocking the access of competitors to their market, so maintaining a hold on a small but very profitable market.
(This abstract was borrowed from another version of this item.)
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.:
- J. Bradford DeLong, 1991. "Did J. P. Morgan's Men Add Value? An Economist's Perspective on Financial Capitalism," NBER Chapters,in: Inside the Business Enterprise: Historical Perspectives on the Use of Information, pages 205-250 National Bureau of Economic Research, Inc.
- Bradford De Long, J., 1991. "Did J.P. Morgan'S Men Add Value? An Economist'S Perspective On Financial Capitalism," Harvard Institute of Economic Research Working Papers 1554, Harvard - Institute of Economic Research.
When requesting a correction, please mention this item's handle: RePEc:eee:exehis:v:41:y:2004:i:3:p:205-232. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.