Publication Number: 4068

Report Title: Property and Casualty Insurance Services: Competitive Conditions in Foreign Markets

Investigation Number: 332-499

Author's name(s): Eric Forden, Jeremy Wise, Richard Brown, Lisa Ferens Alejandro, Tamar Asadurian, Jennifer Baumert, Laura Bloodgood, Samantha Brady, Allison Gosney, Erick Oh, Audry Tafoya, Tani Fukui, Marinos Tsigas

Date Published: March 2009

Report Description/Introductory Text: The global property and casualty (P&C) insurance market, measured in terms of total revenue, is concentrated in three geographic regions, North America, Europe, and North Asia, with automobile insurance representing the single largest market segment. Overall, the P&C insurance markets of developed countries are mature, whereas the markets of many developing countries are growing rapidly. Demand for P&C insurance services is driven by many factors, including economic growth and government regulations. The supply of P&C insurance services is also affected by many factors, including country-level trade policies, price regulation, and government regulations. P&C insurance is sold in global markets through cross-border trade and through the sales of affiliates located in foreign countries, with affiliate sales accounting for the dominant share of international trade in such services. Although most countries establish prudential regulations pertaining to the provision of insurance services, Commission research suggests that many countries maintain nontariff measures (NTMs) that restrict the participation of foreign insurance firms in domestic markets. Econometric models developed by the Commission estimate that NTMs have a significant effect on the profitability of insurance companies in foreign markets. Moreover, the model results suggest that removal of NTMs in foreign countries would result in increased U.S. cross-border insurance exports and affiliate sales, and higher levels of employment in the U.S. P&C insurance industry.



Topics Covered: Property and casualty insurance, property/casualty insurance, p/c insurance, P&C insurance, USTR, United States Trade Representative, U.S. Trade Representative, reinsurance, American International Group, AIG, Lloyd’s of London, Ace Limited, Allianz SE, Assicurazoni Generali, AXA, Chubb, Zurich Financial Services, premiums, insurance density, insurance penetration, loss reserves, unearned premium reserves, policyholder’s surplus, claims, underwriting, premium prices, hard market, soft market, personal lines, commercial lines, bancassurance, insurance broker, non-tariff measure, NTM, regulation, catastrophe, catastrophic, retrocession, assuming insurer, ceding insurer, facultative contracts, treaty contracts, Swiss Re, Munich Re, Berkshire Hathaway, Hannover Re, underwriting cycle, underwriting capacity, Liberty Mutual, taxicab insurance, property rights, rate suppression, cross-subsidization, premium price regulation, cross-border trade in insurance services, affiliate sales of insurance services, World Trade Organization, WTO, GATS, General Agreement on Trade in Services, MAT insurance, marine, aviation and transport insurance, competitive conditions, market size, gross premiums, gross claims, insurance exports, insurance imports, affiliate transactions, U.S. cross-border insurance trade, UK, captive insurer, captive insurance company, global cross-border insurance trade, International Financial Services Center, IFSC, insurance services, U.S. insurance trade through affiliate sales, Bermuda’s International Insurance Industry, XL Capital, U.S. cross-border trade in reinsurance services, measures affecting trade in insurance services, nontariff measures, Financial Leaders Working Group, Financial Leaders Group, FLWG, prudential regulations, Pacific Economic Cooperation Council, Hoekman, frequency ratios, GATS commitments, schedule, liberalization, McGuire and Schuele, restrictiveness, financial services, openness, primary research, secondary research, best practices, model schedule, market access, national treatment, consumption abroad, form of establishment, foreign equity participation, discriminatory measures, compulsory insurance, compulsory lines, overseas representatives, visas and work permits, capital solvency requirements, Deardorff and Stern, inventory of NTMs, TRI, ITRI, insurance trade restrictiveness, derogations, monopolies, restrictions, limitations, monopoly, trade effects, economic development effects, profit effects, employment effects, hearing, George M. Brady, David F Snyder, Robert Gordon, Stephen W. Broadie, Michael Moran, Aon Risk Services, Property and Casualty Insurers Association of America, PCIAA, Council of Insurance Agents and Brokers, CIAB, National Association of Insurance Commissioners, NAIC, American Insurance Association, AIA, gravity model, services trade, services, Isard, Walsh, Brainard, Bergstrand and Egger, foreign direct investment, FDI, BEA, Bureau of Economic Analysis, data, econometric model, dummy variable, log-log specification, Saunders and Schumacher, Kalirajan, OECD, profit earned per dollar premium, price-cost margin, first-stage regression, second-stage regression, firm-level data, adjusted profit margin, Orbis, corruption perception index, property rights index, U.S. International Trade Commission, USITC

Countries: Argentina, Australia, Austria, Bangladesh, Barbados, Belgium, Bermuda, Bolivia, Brazil, Bulgaria, Canada, Cayman Islands, Chile, China, Colombia, Croatia, Czech Republic, Denmark, Ecuador, Egypt, Estonia, France, Finland, Germany, Greece, Guatemala, Hong Kong, Hungary, Iceland, India, Indonesia, Ireland, Israel, Italy, Japan, Jordan, Kenya, Korea (South), Latvia, Lithuania, Luxembourg, Malaysia, Malta, Mexico, Morocco, Netherlands, New Zealand, Norway, Pakistan, Panama, Peru, Philippines, Poland, Portugal, Romania, Russia, Saudi Arabia, Singapore, Slovakia, Slovenia, South Africa, Spain, Sri Lanka, Sweden, Swaziland, Thailand, Tunisia, Turkey, Ukraine, United Arab Emirates, United Kingdom, United States, Venezuela, Vietnam

Click here for full report