Insurance Monopolies

Insurance Monopolies

 

in capitalist countries, one of the most powerful elements of the capitalist credit and finance system, second only to the banking monopolies in the scale of operations.

Insurance monopolies control the insurance market. In the early 1970’s, five insurance monopolies accounted for about 40 percent of all insurance premiums (payments for insurance) issued in the USA, ten monopolies for approximately 75 percent of all premiums issued in Italy, ten monopolies for 65 percent of all premiums issued in Great Britain, and six monopolies for almost 50 percent of all premiums issued in the Federal Republic of Germany (FRG). The major insurance monopolies primarily handle life insurance and other types of personal insurance and manage portfolios of high-yield real-estate mortgages.

The main cause for the growth of insurance monopolies is the workingman’s desire to have some security in case of loss of work, industrial accidents, or the death of the breadwinner. Insurance monopolies become powerful largely by combining insurance and banking operations. Most of their wealth comes from reserves, the temporarily held monetary resources of the population, which account for 80–90 percent of the liabilities.

Insurance monopolies affect many aspects of the economic activity of capitalist countries. They use the money made available to them in credit operations, which account for the greater part of their profits. They are the major source for the long-term financing of industry and other branches of the economy. Accumulated reserves are also made available to capitalist governments; the reserves are invested in loans that become obligations of the government. During World War II insurance monopolies were important in financing the governments of nations at war.

In many countries the government regulates the use of the reserves of insurance monopolies. Insurance monopolies are linked to leading banking and industrial companies through the interlocking of corporate directorates. They affect political activity in capitalist countries because their representatives hold administrative positions in government and the armed forces. On the international market, insurance monopolies have expanded through a network of divisions and branches outside their countries and through reinsurance operations. Certain limitations have been placed on insurance monopolies by the nationalization of the insurance business in developing countries.

The insurance monopolies of the USA surpass their competitors in assets, scale of operations, and number of employees (see Table 1). The Prudential Insurance Company of America handles primarily life and accident insurance. In 1973 automotive, chemical, electronic, oil, and transportation securities accounted for more than 40 percent of its assets, real-estate mortgages for approximately 35 percent, and profits from investments for 1.7 billion dollars. Insurance investment operations abroad are conducted through divisions in Canada, Puerto Rico, and other areas. The Prudential Insurance Company is closely associated with ten leading commercial banks, including the Morgan Guaranty Trust Company of New York, and with almost 50 industrial and transportation companies. It is controlled by the Morgan financial group.

The Metropolitan Life Insurance Company receives 75 percent of its insurance premiums from life insurance and more than 20 percent from accident and health insurance. It has been in the reinsurance business since 1971. In 1973 the company had $15 billion worth of bonds and stocks in industrial, transportation, and trade companies. It operates in Latin America, Western Europe, and Canada and is linked through an interlocking directorate with many of the major insurance and banking corporations and with almost 60 industrial and other companies. The interests of several financial groups, especially the Rockefellers, are represented in the company.

The Equitable Life Assurance Society of the United States for many years has been a creditor of mainly oil monopolies. Life insurance accounts for two-thirds of the premiums it collects, and accident and health insurance for one-third. In 1973, securities in industrial and other companies accounted for 37 percent of its assets. An interlocking directorate links the society with nine major insurance firms, 15 banks, and more than 80 industrial, transportation, and trade companies. The Equitable Life Assurance Society is controlled by the Rockefeller financial group, with Cleveland and Texas groups also being influential.

Prudential Assurance of Great Britain controls more than one-sixth of the reserves of the country’s insurance companies. It specializes mainly in life insurance. The company holds the stocks of more than 1,200 companies and plays an important role in the foreign economic expansion of British monopolies.

The Allianz Versicherungs AG of the FRG has the most extensive insurance coverage and the greatest number of employees of all the insurance monopolies of the country. It handles all types

Table 1. Major insurance monopolies of the capitalist world (1973)
 Year of establishmentNumber employedAssets1 (billions)Insurance premiums1 (billions)Reserves1 (billions)
1 National monetary units
Prudential Insurance Company of America (USA) ...............187558,80035.04.525.8
Metropolitan Life Insurance Company of (USA) ...............186853,30032.04.226.7
Equitable Life Assurance Society of the United States(USA) ...............185921, 10016.42.012.6
Prudential Assurance (Great Britain) ...............184823,5002.60.42.5
Allianz Versicherungs AG (FRG) ...............189018,6005.63.84.2
Allianz Lebensversicherungs AG (FRG) ...............19226,40012.32 18.0

of personal and property insurance and the reinsurance of credits. Automobile insurance accounts for 50 percent of all its premiums. The Allianz Versicherungs AG has 35 branches, including 11 specializing in property insurance and five in personal insurance. The monopoly conducts large-scale operations abroad and has close ties with business circles in Italy, Austria, and France. Together with the Münchener Rückversicherungs-Gesellschaft, the country’s major reinsurance company, it controls the Allianz Lebensversicherungs AG, the largest life insurance monopoly in the FRG and Western Europe. In 1973 the long-term credits of the Allianz Lebensversicherungs AG exceeded 5 billion West German marks, which is more than 60 percent of its reserves.

I. A. AGAIANTS

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