Interlocking Directorates and Concentration in the Italian Insurance Market

Abstract

The Italian insurance market represents a peculiar and puzzling case within the European Single Market. Since the radical deregulation process in 1992, standard indicators have shown a low degree of market concentration. However, at the same time, Italian insurance costs still remain among the highest in Europe due to the existence of widespread collusive practices, which have been largely documented by both the Italian Antitrust Authority and empirical evidence. The main channel of anti-competitive behavior seems to be related to the exchange of information. To improve the understanding of its structure, our paper studies interlocking linkages among firms operating in the Italian insurance market. Interlock linkages are apparent when single directors sit on more than one company's board. Thus, interlock linkages can be viewed as a systemic channel of information exchange and a potential source of collusive practices. We distinguish interlock linkages occurring within and between groups operating under a common ownership because companies operating in the insurance sector may be organized in multi-brand holdings. Therefore, we disentangle interlocking directorates as holding business strategies from systemic structures that might represent potential threats for the market competition.