Reinsurance in the Netherlands from 1800 till 1950: a failure?

Was reinsurance a case of failure in Dutch insurance? This article describes the cumbersome development of reinsurance between the mid-nineteenth century and the mid-twentieth one. Focus is upon life insurance, but non-life is touched upon too. Standard risks, risks insurable nationally, dominate. An institutional perspective is taken. Reinsurance is discussed as an institution, which proved not to be superior to classic co-insurance. During the nineteenth century, insurers developed an interest in reinsurance as a special market or as a market for specialists. That interest, however, had little effect. The interest in reinsurance was embedded in other, more prevailing concerns. Furthermore, externalities were a problem. All this created matching problems and a problem of collective action. Internationally oriented life-insurers opted for nationally organized reinsurance. Nationally oriented insurers preferred international specialists. Insurers considered reinsurance as unavoidable, but at the same time disliked the business. By 1914, a compromise emerged within this special, but limited market. That compromise was lasting. About half of the risks were pooled nationally, half transferred to specialist foreign multinationals.