The The Development of the Life Insurance Market in Central and Eastern European Countries
DOI:
https://doi.org/10.12775/EiP.2024.024Keywords
life insurance; Central and Eastern European countries; dynamic development index; GMM estimatorAbstract
Motivation: The need to implement the process of economic transformation in the recent past is what significantly differentiates the countries of Central and Eastern Europe from other members of the European Union. Integration into the financial system of the European Union has been an important factor influencing the process of transformation of the life insurance sector and the establishment of the level of competition, as well as the quality and scope of insurance services offered. In addition, the improvement in the macroeconomic situation and the increase in household income have had a significant impact on the growth in demand for insurance products from the life insurance segment. Despite positive changes, the insurance market of Central and Eastern European countries remains a relatively underdeveloped market, and its structure, unlike that of Western European countries, is dominated by property insurance. This points towards a need for further research into the determinants of life insurance market growth in this region of Europe.
Aim: The aim of this paper is twofold. The first part presents an assessment of the level of development of the life insurance market in ten countries of Central and Eastern Europe over the period 2011-2021 using the method of multivariate comparative analysis in dynamic terms. The second part of the paper is devoted to an attempt to identify the determinants of the development of this market using econometric models for panel data.
Results: The life insurance market varies widely among the group of countries considered. The trends of change during the period under consideration were also different. The most severe downturn in the life insurance market was recorded in Poland and the Czech Republic. Significant development was observed in Lithuania and Latvia, countries with an underdeveloped market in the past. The econometric models used confirmed the impact of economic development on the life insurance market.
References
Alhassan, A.L., & Biekpe, N. (2016). Insurance market development and economic growth: Ex-ploring causality in 8 selected African countries, “International Journal of Social Economics”, Vol. 43 No. 3, pp. 321-339, https://doi.org/10.1108/IJSE-09-2014-0182.
Babbel, D. (1981). Inflation, Indexation, and Life Insurance Sales in Brazil. The Journal of Risk and Insurance, Vol. 48, No. 1, pp. 111-135.
Beck, T., & Webb, I. (2003). Economic, Demographic and Institutional Determinants of Life In-surance Consumption across Countries. World Bank Economic Review, 17(1), pp. 51–88. https://doi.org/10.1093/wber/lhg011.
Bednarczyk, T.H., Bielawska, K., Jackowska B., & Wycinka E. (2019), Ekonomiczne i demograficz-na uwarunkowania funkcjonowania i rozwoju ubezpieczeń, Wydawnictwo Uniwersytetu Gdańskiego, Gdańsk.
Beenstock M., Dickinson G., & Khajuria S. (1986). The determination of life premiums: An inter-national cross-section analysis 1970-1981. Insurance: Mathematics and Economics, Elsevier, Vol. 5(4), pp. 261-270.
Blundell, R., & Bond, S. (2000). GMM estimation with persistent panel data: An application to
production functions. Econometric Reviews, Vol. 19, pp. 321–340, https://doi.org/10.1080/07474930008800475.
Bożeka, J., Szewczyk, J., Badach ,E., & Lisek, S. (2022). Ocena poziomu rozwoju gospodarczego województw z zastosowaniem metod porządkowania liniowego w ujęciu dynamicznym, Wia-domości Statystyczne. The Polish Statistician, Vol. 67, No. 12, pp. 39–61, https://doi.org/10.5604/01.3001.0016.1613.
Browne, M. J., & Kim K. (1993). An international analysis of life insurance demand. The Journal of Risk and Insurance, Vol. 60 (4), pp. 616-634, https://doi.org/10.2307/253382.
Celik, S., & Kayali, M. M. (2009). Determinant of demand for life insurance in European coun-tries. Problems and Perspectives in Management, Vol. 7 (3), pp. 32-37. https://www.businessperspectives.org/images/pdf/applications/publishing/templates/article/assets/2782/PPM_EN_2009_03_Celik.pdf.
Chang, T., Lee, C. & Chang, C.H. (2014). Does insurance activity promote economic growth? Fur-ther evidence based on bootstrap panel Granger causality test, The European Journal of Fi-nance, 20:12, pp. 1187-1210, https://doi.org/10.1080/1351847X.2012.757555.
Dańska-Borsiak, B. (2011). Dynamiczne modele panelowe. Wydawnictwo Uniwersytetu Łódzkiego, Łódź.
Dragos ,S. L. (2014). Life and non-life insurance demand: the different effects of influence factors in emerging countries from Europe and Asia, Economic Research-Ekonomska Istraživanja, 27(1), pp. 169- 180, https://doi.org/10.1080/1331677X.2014.952112.
Dragoş ,S.L., Mare, C., & Dragoş, C.M. (2018). Institutional drivers of life insurance consumption: a dynamic panel approach for European countries. Geneva Papers on Risk and Insurance - Is-sues and Practice, 44, pp. 36–66. https://doi.org/10.1057/s41288-018-0106-3.
Dragos, S.L., Mare, C., Dragota, I.M., Dragos, C.M., & Muresan, G.M. (2017). The nexus between the demand for life insurance and institutional factors in Europe: new evidence from a panel data approach. Economic Research Ekonomska Istraživanja, 30:1, pp. 1477-1496. https://doi.org/ 10.1080/1331677X.2017.1325764.
Ertl, M. (2017). Insurance Convergence and Post-crisis Dynamics in Central and Eastern Europe. Geneva Papers on Risk and Insurance - Issues and Practice, 42, pp. 323–47. https://doi.org/10.1057/s41288-017-0043-6.
Hodula, M., Janku, J., Casta, M., & Kucera, A. (2020). On the Determinants of Life and Non-Life Insurance Premiums. Working Paper Series 8/2020. Czech National Bank.
Hwang, T., & Gao, S. (2003). The determinants of the demand for life insurance in an emerging economy – the case of China, Managerial Finance, Vol. 29 No. 5/6, pp. 82-96, https://doi.org/10.1108/03074350310768779.
Kjosevski, J. (2012). The Determinants of Life Insurance Demand in Central and Southeastern Europe. International Journal of Economics and Finance, 4. https://doi.org/10.5539/ijef.v4n3p237.
Kotliński, K., & Warżała, R. (2020), Euro a proces konwergencji państw Europy Środkowo-Wschodniej. Próba oceny, Instytut Badań Gospodarczych, Olsztyn.
https://doi.org/10.24136/eep.mon.2020.11.
Kurdyś-Kujawska, A., & Sompolska-Rzechuła, A. (2019). Determinanty popytu na ubezpieczenie na życie: przykład rolników z regionu północno-zachodniej Polski. Prace Naukowe Uniwersy-tetu Ekonomicznego we Wrocławiu, Vol. 63, pp. 71-81. https://doi.org.10.15611/pn.2019.7.06.
Lament, M., & Bukowski, S., (2022), Wybrane determinanty rozwoju rynków ubezpieczeniowych krajów Unii Europejskiej w latach 1999–2019, Wiadomości Ubezpieczeniowe, 2022, nr 4, pp.61-73, https://doi.org/10.33995/wu2022.4.4.
Liebenberg, A., Carson, J., & E. Dumm, R. (2012). A Dynamic Analysis of the Demand for Life In-surance. Journal of Risk and Insurance, 79 (3), pp. 619-644. https://doi.org/10.1111/j.1539-6975.2011.01454.x.
Mare, C., Dragos, S.L., & Dragota, I.-M. (2019b). The impact of human development on the Roma-nian life insurance market: A county spatial econometric analysis. Cogent Business & Man-agement, Taylor & Francis. Vol. 6, pp. 1-15, https://doi.org/10.1080/23311975.2019.1707609.
Mastalerz-Kodzis, A., & Pośpiech, E. (2015). Wielowymiarowa analiza porównawcza w ujęciu dynamicznym na przykładzie wybranych charakterystyk ekonomicznych, Metody Ilościowe w Badaniach Ekonomicznych, Tom XVI/4, 2015, pp. 24 – 33.
Novovic Buric, M., Bacovic ,M. M., Cerovic, J., & Lipovina Bozovic, M. (2017). Factors Influencing Life Insurance Market Development in Montenegro. Periodica Polytechnica Social and Man-agement Sciences, 25(2), pp. 141-149, https://doi.org/10.3311/PPso.10049.
Ostrowska-Dankiewicz, A., & Simionescu, M. (2020). Relationship between the insurance mar-ket and macroeconomic indicators in the EU member states, Transformations in Business & Economics”, Vol. 19, No. 51, pp. 175-187.
Sedlmayer, S. (2023). Munich Re talking about inflation and its impact on (re)insurance,
Sharku, G., Grabova, P., & Vullnetari, D. (2021). Impact of Economic Factors on Life and Non- Life Insurance Development in Albania – A VECM Analysis. Universal Journal of Accounting and Finance, 9(6), pp. 1280 – 1296. https://doi.org/10.13189/ujaf.2021.090608.
Stroiński, E. (2010), Rynek ubezpieczeń w Polsce na tle sytuacji w Europie Środkowej i Wschod-niej, Wiadomości Ubezpieczeniowe 2.
Śliwiński, A., Michalski, T., & Roszkiewicz, M. (2013). Demand for Life Insurance-An Empirical Analysis in the Case of Poland. Geneva Papers on Risk and Insurance - Issues and Practice, 38, pp. 62–87. https://doi:org/10.1057/gpp.2012.21.
The Polish Chamber of Insurance (PIU), 2022, Raport roczny, https://piu.org.pl/raport-roczny-piu/.
Truett D., &Truett L. (1990). The Demand for Life Insurance in Mexico and the United States: A Comparative Study. The Journal of Risk and Insurance, Vol. 57, pp. 321-328
Zhang, Z., Xu, H., Shan, S., Lu, Y., Duan, H.,& Yipin Lyu, Y. (2022). Exploration of the impact of demographic changes on life insurance consumption: empirical analysis based on Shanghai Cooperation Organization. Economic Research-Ekonomska Istraživanja. https://doi.org/10.1080/1331677X.2022.2134905.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2024 Iwona Laskowska
This work is licensed under a Creative Commons Attribution-NoDerivatives 4.0 International License.
Stats
Number of views and downloads: 40
Number of citations: 0