Abstract: Head-on Harmful Cooperation—Why Firms Cooperate When It's Bad for Them: The Case of Swedish Property Insurance, 1855-1949
This paper explores the Swedish non–life insurance sector's ownership and boardroom ties in order to explain the increase in within-sector collaboration that also is correlated with worsened performance by the individual insurance companies. Insuring the assets of large family-owned export businesses that led the Swedish industrialization in the late nineteenth century, the insurance companies were also directly part of the ownership and control structures that made up the Swedish business groups. Some stock companies had owner ties to powerful industrial families, while some mutual insurers were created to cover more homogenous needs of industrial sub-groups. At the turn of the century national insurance companies, regardless of organizational form, cooperated increasingly, and the first half of the twentieth century is characterized by a growing web of both external and within-sector boardroom ties. In this investigation, links to external industrial groups, or economic performance prior to entry into cooperation, do not provide clear proof as to whether bad performance by collaborating insurance companies was an expression of insurance having become integrated into the profit planning of industrial groups, or if collaboration was indeed a last resort for struggling insurers. The character of within-sector and external interlocking directories of the Swedish insurers does, however, show the extent to which multiple directorships occurred within the industry, and that mutual and stock companies were similarly connected to each other, whereas stock companies had more external ties.