Insurance Markets and Competition

Charles Andoh ()
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Charles Andoh: University of Ghana Business School, Department of Finance

Chapter 8 in Fundamentals of Managing Risk and Insurance, 2026, pp 149-177 from Springer

Abstract: Abstract One of the fundamental characteristics of a perfectly competitive market is the unrestricted freedom of entry and exit for both insurers and policyholders. In such a market, participants are presumed to have complete and accurate information regarding the products available, the products are relatively homogeneous, and pricing is governed solely by the forces of supply and demand. In reality, insurance markets diverge from these ideal conditions, as insurers are required to comply with regulatory standards prior to market entry. This chapter provides a detailed analysis of these market imperfections and examines strategies for their effective management. It further investigates the factors that constrain the demand for insurance, emphasises the critical role of insurance in societal risk management, and discusses methodologies for the effective marketing of insurance products. Moreover, the chapter considers the advantages of robust competition within the insurance sector, provides an in-depth assessment of the phenomenon of underpricing, and evaluates its underlying causes, market implications, and potential mechanisms for mitigation.

Keywords: Competition; Information problems; Underpricing (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-981-95-4581-0_8

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DOI: 10.1007/978-981-95-4581-0_8

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