The effect of the Gramm-Leach-Bliley Act on the insurance industry

We discuss the evolution of the Gramm-Leach-Bliley Act and examine its effect on the insurance industry. We observe an increase in shareholder wealth for the industry as a whole and for industry segments. Additionally, we document a decrease in risk across the insurance industry following events associated with the Act. We also identify the types of firms that benefit most from the Act, finding that property-casualty insurers are the primary beneficiaries. Despite concerns about consolidation in the financial services industry as a result of the Act, we do not find that there is any change in concentration in the insurance industry.