Unlike its American and Japanese rivals, the Swiss watch making industry did not adopt the form of the big enterprise in the 20th century but organized itself as an industrial district. Whereas it dominated 90% of world market around 1900, the Swiss watch making industry accounted a total of 663 firms (1901), of which only seven employed more than 500 workers. They were mainly small family firms specialized in a single part of the process of production which was characterized by a horizontal and vertical division of labor. Moreover, an original feature of this industry was the set up of a cartel during the interwar, with the aim to protect its industrial district structure, on the one hand, and to control technology transfer, on the other hand. The raise of protectionism throughout the world after 1918 led indeed to a tendency of exporting unfinished watches and to assemble them within the countries where there were sold, a practice known as chablonnage. This technology transfer sustained the expansion of rival companies, especially in the US and in Japan. In order to put an end to such a practice, the Swiss watch makers gathered in unions which adopted in 1928 some agreements which the main objectives were to ban chablonnage and to maintain in Switzerland an organization as an industrial district. These agreements were strengthened by the set up in 1931 of a holding company for controlling parts and movements makers (ASUAG) and by the intervention of the State which legalized this cartel (1934). Nevertheless, this cartelization could not prevent the appearance of newcomers after 1945, particularly in the US and in Japan. The cartel was eventually abandoned in the 1960's, in order to make it possible a modernization of the structures of the Swiss watch making industry to improve its competitiveness on the world market.
The purpose of this paper is to investigate the nature of the competition in the Japanese marine insurance business in the 1890s, including the effect of the premium cartel of 1897. Firstly, the paper examines the business of Tokio Marine Insurance Company (“Tokio Marine”) in London. Tokio Marine was unable to realize growth in the Japanese market and, to seek opportunities, expanded its business to London. Initially, Tokio Marine's business in London was extremely successful, but as a result of issuing a risky insurance, Tokio Marine sustained a very large loss. Secondly, the paper examines the businesses of Tokio Marine, Nippon Sea and Land Insurance Company (“Nippon Sea”) and Imperial Marine Company (“Imperial Marine”) from 1893 to 1896. Tokio Marine, Nippon Sea and Imperial Marine expanded their businesses by issuing insurances with low premiums. As a result, the profitability of Tokio Marine, Nippon Sea and Imperial Marine suffered. Thirdly, the paper examines the spread of agent networks in the Japanese marine insurance business. Low-premium insurances were widely sold through networks of agents mainly comprising bank branches and shipping agents. Lastly, the paper examines the premium cartel of 1897 among Tokio Marine, Nippon Sea, Imperial Marine and Nippon Marine Insurance Company. The purpose of this cartel was to increase premiums and, as a result, premiums did increase temporarily. The cartel did not provide, however, a penalty for violation. Consequently, premiums eventually decreased.