Efficient Monopolies: The Limits of Competition in the European Property Insurance Market

In view of the increase in major floods and other forms of natural damage (such as subsidence) over the last decades, the non-availability of insurance cover in many competitive insurance systems is likely to become a major political issue. This book shows that state monopoly is an adequate policy response. Competitive insurance systems are shown to provide incomplete cover at a substantially higher cost. In mixed systems, where the private sector can obtain reinsurance from the state (such a system is being tried in France) the state tends to end up paying most of the costs (it reinsures most of the bad risks) while the private insurance companies keep most of the premium income.

The book will be of interest to academic economists interested in privatization, regulation, the theory of the firm, and insurance; Policy-makers concerned with regulation and privatization; Insurance companies, regulators, and analysts.