Does Organizational Heritage Matter in the Development of Offshore Markets? The Case of Australian Life Insurers

Abstract

The globalization of fi nancial markets over the past decade has focused the spotlight on the responsiveness of fi nancial fi rms to international pressures. Insurance markets have traditionally relied on global networks not only to expand the insurers' sphere of infl uence but also to support domestic business. Until relatively recently, Australian insurance companies have not played a signifi cant role in the development of international markets. However, in the last decade of the twentieth century Australian insurers ventured overseas on a scale without precedence. This article presents an historical perspective on the internationalization of the Australian life-insurance market with a view to understanding why these fi rms have been classifi ed "late starters" in the internationalization stakes. In a broader capacity it provides insights into the impediments to overseas expansion and the forces encouraging or discouraging the development of cross border networks. nsurance was one of the very fi rst markets to develop on a global basis. A number of studies have demonstrated the link between insurance products and the growth strategies of insurance providers. 1 Mira Wilkins traces the development of international insurance markets, pointing to how strategic insurance fi rms were in developing crossborder relationships and the value of these international markets to their bottom line. 2 The British were among the fi rst to build the insurance 1 Recent publications highlight the extent of research undertaken in this respect: Peter

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“…The key strategy adopted in the early 1990s was to extend the internationalisation agenda with the view of becoming a global company. In addition to London Life and Pearl in the United Kingdom, a life office was opened in Hong Kong in 1992 and a joint venture with an Indonesian insurer launched in the same year (Keneley, , pp. 269–70).…”

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“…This meant that the management of these other business activities were distinct from that of life insurance. Off shore expansion was also limited and seen as an adjunct to domestic business and managed in the same way (Keneley ).…”