This chapter investigates efficiency and competition in the Dutch life insurance market by estimating unused scale economies and measuring efficiency–market share dynamics during 1995–2010. Large unused scale economies exist for small and medium-sized life insurers, indicating that further consolidation would reduce costs. Over time, average scale economies decrease, but substantial differences between small and large insurers remain. A direct measure of competition confirms that competitive pressure is lower than in other markets. The author does not observe any impact of increased competition from banks, the so-called investment policy crisis or the credit crisis, apart from lower returns in 2008.
Jacob A. Bikker and Laura Spierdijk
Edited by Jacob A. Bikker and Laura Spierdijk
For academics, regulators and policymaker alike, it is crucial to measure financial sector competition by means of reliable, well-established methods. However, this is easier said than done. The goal of this Handbook is to provide a collection of state-of-the-art chapters to address this issue. The book consists of four parts, the first of which discusses the characteristics of various measures of financial sector competition. The second part includes several empirical studies on the level of, and trends in, competition across countries. The third part deals with the spillovers of market power to other sectors and the economy as a whole. Finally, the fourth part considers competition in banking submarkets and subsectors.