Reviewing European life insurance regulation: A marketing perspective
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Kerry E. Howell is a senior lecturer and Jean Monnet Associate at Anglia Business School. His areas of research include European integration theory and financial services.
Abstract In 1988 the discussions about a Single European Market (SEM) in life insurance intensified. Because of the impetus the Single European Act (SEA) gave to the construction of the internal market in general, there was a greater emphasis on creating a single market in financial services. Streamlined policy-making processes and the enhancement of compromise and interaction between the Member States accompanied this on increasing and expanding issues. To identify these processes the paper surveys the literature regarding the European treaties, European decision-making procedures, and the use of European interest groups in the formulation of the Third Life Assurance Directive. Fundamentally, the paper argues that through economic and political incentives, there was a more concerted effort in the creation of a SEM in life insurance and that this creates new dynamics for the field of marketing. Keywords life insurance, insurance regulation, Single European Market, Third Life Assurance Directive
INTRODUCTION
Kerry E. Howell Anglia Business School (APU), Victoria Rd South, Chelmsford CM1 1LL, UK. Tel: +44 (0)2145 493131 X3355; Fax: +44 (0)1245 48768; e-mail: [email protected]
This paper provides an analysis of the discussions relating to life insurance and the formulation of the Single European Market (SEM). It surveys and reviews the literature relating to European harmonisation and gives an insight into the procedures and difficulties encountered in the pursuit of a single market in life insurance. In addition, the paper identifies the socio-economic and cultural difficulties encountered in the formulation of insurance regulation and outlines the effects these may have on marketing financial services. The paper takes into consideration the special nature of life insurance and other financial services products. Indeed, it posits
# Henry Stewart Publications 1363-0539 (2001)
Vol. 5, 3, 263–274
that life insurance, pensions and other investment products are closely linked to individual cultures. ‘Differences in the way distinct countries subjectively value insurance products have not come into being by chance. They have evolved out of historically developed differences in values between one national society and another.’1 This situation exists between the separate Member States and relates to other financial services products. Life insurance is culturally bound and if a SEM can be realised in this industry, it is highly likely that it may be realised in other financial services industries. In an early period of harmonisation this would have an impact on a number of marketing issues in terms of product differentiation and advertising.
Journal of Financial Services Marketing
263
Howell
During the early 1980s, most UK marketing managers did not consider that the SEM would affect their jobs to any great extent. Cross-border trade would
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