Years ago I read an study about insurance companies and diversification of assets in Brazil. By regulation, an individual insurance company need to have a diversified investment portfolio, but the insurance market as a whole not, so the diversification of every individual company, as a whole all the insurance market was exposed and the researchers found, iirc, like 3 banks that if they fail can they cause a chain reaction that would take out the entire insurance market.

Don’t know why, but your comment made me remind of that.