Market power relationships among life insurance intermediaries : The power of giants

The imposed commission ban to Finnish insurance intermediaries has generated some controversy and the intermediary market has experienced consolidation in the few last years. The thesis examines the relationship between market structure and profitability among Finnish life insurance intermediaries and tests for the applicability of two market power hypotheses. The panel data analysis shows that there is support for the Relative Market Power hypothesis while the Structure-Conduct-Performance hypothesis is not applicable for Finnish life insurance intermediaries. The implication of this research is that competition authorities should be concerned with market structure effects when discussing changes to the regulatory environment which surrounds life insurance intermediaries.