The nexus between the demand for life insurance and institutional factors in Europe: new evidence from a panel data approach
| Autor: | Codruta Mare, Ingrid-Mihaela Dragota, Simona Laura Dragos, G. Muresan, Cristian Dragos |
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| Jazyk: | angličtina |
| Rok vydání: | 2017 |
| Předmět: |
Economics and Econometrics
050208 finance Actuarial science 05 social sciences Control variable General insurance Key person insurance Life insurance 0502 economics and business Institutional determinants European countries life insurance demand panel data Business Risk pool 050207 economics Income protection insurance Nexus (standard) Panel data |
| Zdroj: | Economic research-Ekonomska istraživanja Volume 30 Issue 1 |
| ISSN: | 1848-9664 1331-677X |
| Popis: | We investigate the influence of institutional factors upon life insurance demand for 32 European countries, considering the sociodemographic and economic determinants as control variables. Using a panel data approach, we find that life insurance demand is influenced differently by institutional indicators from the Worldwide Governance Indicators database, in emerging and transition markets compared to developed ones. The sound legal environment of developed countries, where the level of the rule of law is very homogeneous and very high, makes it non-significant for life insurance demand. For developing countries the enforceability of contracts, the independence of justice and the time efficiency of the judicial process positively influence the decision of citizens to buy life insurance contracts. The effect of income distribution over life insurance density varies across these two categories of countries. For transition and emerging markets we find a positive relationship between life insurance density, income distribution and level of urbanisation. In developed countries, because of the high levels of income, life insurance became a common good, not a luxury one, which makes income distribution an insignificant factor. For emerging and transition countries policymakers should concentrate more on strengthening trust in the insurance sector for reducing the gap with developed countries. |
| Databáze: | OpenAIRE |
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