Cross-border Insurance in Europe: Challenges for Supervision

Forthcoming in The Geneva Papers on Risk and Insurance

Duisenberg School of Finance Policy Paper No. 45

31 Pages Posted: 21 Nov 2014 Last revised: 25 Nov 2015

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)

Jan Sass

Duisenberg School of Finance

Date Written: November 24, 2015

Abstract

At the start of Solvency II in January 2016, there is no overview of the insurance market in Europe. This paper develops a methodology to link various datasets on foreign branches and subsidiaries. The result is a new and comprehensive dataset of cross-border insurance in Europe. We find that cross-border business in insurance is higher than in banking. We also find that the share of cross-border insurance has increased over the last decade, notwithstanding the global financial crisis.

EIOPA, the European supervisory authority, plays a coordinating role among the national supervisors in the approval of internal models under Solvency II. Game theory suggests that there are limits to the coordination model. The increasing share of cross-border insurance, documented in this paper, may tilt the supervisory balance from coordination towards centralisation in an Insurance Union.

Keywords: insurance markets; measures for internationalisation; level playing field; financial supervision

JEL Classification: G22, G18

Suggested Citation

Schoenmaker, Dirk and Sass, Jan, Cross-border Insurance in Europe: Challenges for Supervision (November 24, 2015). Forthcoming in The Geneva Papers on Risk and Insurance, Duisenberg School of Finance Policy Paper No. 45, Available at SSRN: https://ssrn.com/abstract=2527644 or http://dx.doi.org/10.2139/ssrn.2527644

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

Jan Sass

Duisenberg School of Finance ( email )

Gustav Mahlerplein 117
Amsterdam, 1082 MS
Netherlands

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