Ownership Concentration and Governance in the U.S. Insurance Industry

Concentration in the U.S. insurance industry's market shares and ownership, coupled with a network interlocking ownership relationships by institutional investors, raise social concerns. Studying the relationship between Tobin's q and corporate governance features of the industry, we fail to find support for the incentive alignment or entrenchment hypotheses, but our findings are consistent with the hypothesis that controlling owners may couple with others to expropriate private value from minority shareholders. An interesting observation from the study is the degree to which family control is prevalent in the industry; combining family control and institutional ownership makes most stock insurers closely held