U.S. INSURERS' ENTRY INTO EUROPE'S SINGLE MARKET

Abstract

The EC single market is one of the world's largest. It offers both opportunities and challenges to U.S. insurers wanting to expand their operations into that market. Some U.S. companies possess unique qualifications that give them a good competitive position vs. European companies. Greater financial capacity, extensive underwriting experience particularly in the area of environmental U.S. insurers have focused on their vast home market which is responsible for approximately 37 percent of global insurance premiums. pollution and product liability, unique products and services of special appeal to European consumers, and the ability to service integrated international insurance programs are just a few examples. However, certain barriers may stand in the way of U.S. insurers’ entry to Europe. High entry cost, regulatory constraints, keen domestic competition, the possibility of lower profit margins, and the likelihood of certain protectionist policies are examples of these barriers. U.S. insurers are also concerned about entering an unknown market with radically different cultural characteristics and considerable national differences still existing among its members which would require adapting their approaches to the peculiarities of each country's insurance market instead of being able to use their own ideas about methods of operation. Nonetheless, U.S. insurers should abandon their domestic orientation and conservative nature and seek to resolve those difficulties that hinder their path of entry to Europe. The EC market is too important to be ignored.

Citation

Hamwi, I.S. and Niroomand, F. (1994), "U.S. INSURERS' ENTRY INTO EUROPE'S SINGLE MARKET", Competitiveness Review, Vol. 4 No. 2, pp. 37-46. https://doi.org/10.1108/eb060187