Interlocking Directorates as a Trust Substitute: The Case of the Italian Non-Life Insurance Industry

This paper investigates the market structure of the insurance business byanalyzing the (interlock) linkages among companies created by their directors. Wefocus on the non-life business since this is a sector relatively closed with respect tothe competition with other financial activities; an absence of industry competitioncannot thus be compensated by other agents. We apply the graph theory to describethe network and the principal component analysis to summarize information andverify the correlation between direct interlocking and companies’ market shares.