Abstract: Compares the market for property insurance in five European countries, Britain, Spain, France, Switzerland, and Germany. The comparisons are of particular interest, as the regulatory frameworks vary widely from country to country and so do the market outcomes, both in terms of premium level and in terms of available insurance cover. In particular, the state insurance monopolies in Spain and parts of Switzerland permit property owners to obtain global cover against a wide range of natural damages (including floods) at a very low premium rate. The premiums of private insurance companies are much higher because they typically spend more than one third of premium income on commissions and administrative costs. State monopolies are considerably more efficient in this respect.In several countries, insurance against occurrences such as floods is not available in competitive insurance systems, or it is offered only to the better risks. This is probably due to problems of adverse selection. For compulsory state monopolies, adverse selection is not an issue.

Keywords: adverse selection, catastrophe insurance, deregulation, premium rate, prevention, property insurance, regulatory capture, state monopoly