Interlocking Directorates as a Trust Substitute: The Italian Non-Life Insurance Industry
1st International NPR Workshop: Networks, Power and Relations, September 16-17, 2009, Milan, Italy
26 Pages Posted: 26 Nov 2012
Date Written: September 17, 2009
This paper investigates the Italian insurance system by analyzing the (interlock) linkages among companies created through their directors. This approach defines interlocking directorates as the tie created between two companies when a person is a member of both boards of directors; each case of administrators’ co-presence is thus a connection between companies. The investigation follows a two-step procedure: first, it analyzes the social network of the insurance industry by focusing on the linkages among directors and among companies. Second, network statistics are combined in synthetic indices through principal component analyses in order to verify a correlation between indices and companies’ market shares. For the sake of brevity, this analysis is mainly restricted to non-life insurances, which are indeed the least competitive (as claimed 11 companies control the 78% of market) and most closed compared to the competition of other financial agents (life insurances compete with other forms of financial investments).
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