Abstract: What shapes and drives capital market development over the long run? In this paper, using the asset portfolios of UK life assurers, we examine the role of regulation, historical contingency, and political reactions to events on the long-run development of the UK capital market. Government response to events such as war, hegemony-secured peace, and the wider macroeconomic environment was the ultimate determinant of major changes in asset allocation since 1800. Furthermore, when we compare the UK with the United States, we find that regulation played a limited role in shaping the asset portfolios of the UK life assurance industry.
Lay Summary: ‘Life assurance’ involves the policyholder paying a series of premiums that are paid out to a beneficiary when the policyholder dies. This practice has a long history stretching back almost 300 years, and life assurance companies have been an important feature of capital markets since 1800. This makes these companies the perfect testbed to measure the impact of factors such as war, inflation and finance on the capital market, in both the UK and further afield. This paper categorises and identifies key periods in this long history of capital market activity through these life assurance companies, considering external, governmental, and internal impacts on both the market and industry over nearly 200 years.
Cite this article:
David A. Bogle, Christopher Coyle, John D. Turner, ‘Capital market development over the long run: the portfolios of UK life assurers over two centuries’, European Review of Economic History, Volume 26, Issue 3, August 2022, pp 370–398.
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