Stimulating the Demand for Insurance

Using panel data of 39 countries over the period 1979-2007, this paper is the first to empirically examine the influence of the KOF index of globalisation (overall and its three main sub-indices) on the development and convergence of international life insurance markets by a panel cointegration technique. We find that globalisation has a significant impact on the development of international life insurance markets and on reducing the deviation between individual countries' life insurance penetration and the world average. Economic and social dimensions exert a similar effect as well, and the effect of economic globalisation is higher, while the effect of political dimension is not significant. In addition, social globalisation plays a dominant role on the interactive influence of different dimensions of globalisation, implying that socio-cultural factors are a latent factor behind economic or political influence. Finally, most countries' structural breaks coincide with the fast growth wave of international life insurance markets.

supporting

confidence: 52%

“…12 Hussels et al (2005) and Lee and Chiu (2012). 13 For the limitation of space, we do not delineate related factors here but refer interested readers to Hussels et al (2005) for details. 14 World population ageing 2009 (Population Division of the Department of Economic and Social Affairs of the United Nations).…”

mentioning

confidence: 99%

Globalisation and Convergence of International Life Insurance Markets

Chang

2012

“…33 We assign 0 to insurance markets where product pricing is not explicitly regulated and 1 otherwise. 34 For a review of research studies that found support for this relationship, see Hussels et al (2005). The data is obtained from various sources.…”

Section: Methodsmentioning

confidence: 99%

Liberalisation and Market Concentration Impact on Performance of the Non-Life Insurance Industry: The Evidence from Eastern Europe

Njegomir

Stojić

2011

The aim of this paper is to examine market structure, conduct and performance relationship (S-C-P) hypothesis for the non-life insurance industry in Eastern European countries. Additionally, we examine the effect of liberalisation on market structure and performance. We use the country-specific fixed effects models for panel data for the period 2004-2008 allowing each cross-sectional unit to have a different intercept term serving as an unobserved random variable that is potentially correlated with the observed regressors. Three models are presented, each placing market structure, liberalisation and profitability in a distinct environment defined by related control variables. The research results support the S-C-P hypothesis in all of the observed models, showing evidence of strong influence of market structure and liberalisation on market profitability. These results could be useful in decision-making for both governments and insurance companies.

“…6 Ward and Zurbruegg (2002); Esho et al (2004); Feyen et al (2011). 7 Hussels et al (2005). 8 Busse and Hefeker (2007).…”

Section: Introductionmentioning

confidence: 99%

Natural Disasters, Political Risk and Insurance Market Development

Chang

Berdiev

2013

We examine the relationship between natural disasters, political risk and insurance market development in a panel of 39 countries over the period 1984-2009 using a dynamic panel two-step system generalised method of moments model. We provide evidence that the incidences of natural disasters and deaths caused by natural disasters lead to greater total insurance, as well as life insurance and non-life insurance consumption. We also find that countries with lower levels of political risk experience higher insurance consumption. The incidences of natural disasters and deaths attributable to natural disasters contribute to insurance market development under the tenure of a government with lower levels of political risk. We therefore emphasise that natural disasters, political risk and their interaction effects are important determinants of insurance market development.