Abstract: Regulatory Regimes and the Globalization of Insurance

Robin Pearson and Mikael Lönnborg


At the end of the twentieth century the global diffusion of one important financial service, insurance, was encouraged by deregulation, but it also encountered difficulties where deregulation remained incomplete and where there were many non-regulatory barriers to entry. International insurance was already well developed before 1914. The growth in the global insurance trade, however, occurred against a background of increasing national regulation and fiscal burdens in many countries, making international business affordable only for the largest companies with the deepest reserves. The object of this paper is to present some preliminary estimates of the extent of the international insurance trade during the half century before the First World War, and to assess the impact of national regulatory regimes and non-regulatory factors on the development of this business. The analysis is placed within the framework of modern theories of regulation, multinational enterprise, and internationalization.