Degree of insurance markets integration based on the case of the EU-15 countries

• Published in: Wiadomości statystyczne Vol. 69; no. 6; pp. 1 - 17
• Main Authors: Lament, Marzanna, Bukowski, Sławomir
• Format: Journal Article
• Language: English
• Published: Statistics Poland 2024; Główny Urząd Statystyczny
• Subjects: Economy; Financial Markets; Socio-Economic Research; insurance; written premium; EU15 countries; integration of insurance markets; investments; insurance companies
• ISSN: 0043-518X; 2543-8476

The international integration of insurance markets plays an important role in the development of these markets. EU directives freed insurance companies from the requirement to regulate prices and insurance conditions, while also removing other competition-related regulatory obstacles. However, legal systems as well as institutional and cultural features still differ significantly across EU countries. According to the basic concept of financial market integration, the law of one price applies. This means that assets generating identical cash flows have the same price (rate of return) within an integrated financial market. The insurance market is characterised by certain specificity arising from the diversity and complexity of insurance contracts, causing difficulty in assessing integration processes. Consequently, issues related to the integration of the insurance market are poorly recognised and require more in-depth research. The aim of the study discussed in the article is to examine to what degree the insurance markets in the EU-15 countries are integrated. The study period covers the years 1999–2021. The data have been extracted from the databases of OECD Statistics and the European Insurance Occupational Pensions Authority. The measures of the integration of insurance markets have been determined with regard to gross written premium and investments. The empirical analysis was based on statistical and econometric methods and indicated a high level of insurance markets integration of the EU-15 countries. The measurement was based on integration indicators, which showed a further upward trend.