On the Choice of Organizational Form: Theory and Evidence from the Insurance Industry

2013 ◽  
pp. 669-687 ◽  
Author(s):  
David Mayers ◽  
Clifford W. Smith
Keyword(s):  
Insurance Industry ◽  
Organizational Form ◽  
Form Theory

scholarly journals An Incomplete Revolution: Corporate Governance Challenges of the London Assurance Company and the Limitations of the Joint-Stock Form, 1720–1725

2019 ◽  
Vol 21 (1) ◽  
pp. 239-270
Author(s):  
MICHAEL ALDOUS ◽  
STEFANO CONDORELLI
Keyword(s):  
Eighteenth Century ◽  
Corporate Governance ◽  
Business Model ◽  
Insurance Industry ◽  
A Priori ◽  
Organizational Form ◽  
Insurance Companies ◽  
Marine Insurance ◽  
Corporate Form ◽  
Governance Challenges

The London Assurance (LA) was incorporated in 1720, marking a significant innovation in the marine insurance industry. Contemporaries anticipated joint-stock firms such as the LA would rapidly outcompete private underwriters, yet this outcome did not occur. The success of the private underwriters has been ascribed to their organizational form. This paper reassesses these explanations and finds that, rather than an a priori worse business model, various corporate governance challenges limited the LA’s capacity to compete. This provides a more complete explanation for the relative failure of the joint-stock marine insurance companies and has implications for understanding the evolution of the corporate form in the eighteenth century.

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