The Emergence of Cross-Border Insurance Groups within Europe with Centralised Risk Management

Geneva Papers on Risk and Insurance - Issues and Practice, Vol. 33, pp. 530-546, 2008

20 Pages Posted: 24 Dec 2007 Last revised: 18 Feb 2010

See all articles by Dirk Schoenmaker

Dirk Schoenmaker

Rotterdam School of Management, Erasmus University; Erasmus Research Institute of Management (ERIM); Centre for Economic Policy Research (CEPR)

Date Written: 2008

Abstract

This paper analyses the degree of internationalisation of insurance business. Using a novel dataset of 25 large EU insurance groups, we find that the insurance industry has a strong international orientation. About 55 per cent of the business of these large insurance groups is conducted abroad. The cross-border activities are predominantly within Europe (30 to 35 per cent) and less so in the rest of the world (20 to 25 per cent). Next, this paper examines the impact of internationalisation on the organisational structure. We find a clear trend towards centralising risk and capital management activities within large insurance groups, though insurance remains at the same time a local business. Applying the hub and spoke model, we identify which functions are executed at the centre (hub) and which functions are performed at the local business units (spokes).

Keywords: insurance companies, international business, organisational structure

JEL Classification: F23, G22, L22

Suggested Citation

Schoenmaker, Dirk, The Emergence of Cross-Border Insurance Groups within Europe with Centralised Risk Management (2008). Geneva Papers on Risk and Insurance - Issues and Practice, Vol. 33, pp. 530-546, 2008, Available at SSRN: https://ssrn.com/abstract=1078306

Dirk Schoenmaker (Contact Author)

Rotterdam School of Management, Erasmus University ( email )

P.O. Box 1738
Room T08-21
3000 DR Rotterdam
Netherlands

HOME PAGE: http://www.rsm.nl/people/dirk-schoenmaker/

Erasmus Research Institute of Management (ERIM) ( email )

P.O. Box 1738
3000 DR Rotterdam
Netherlands

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

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