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Country factor behavior for integration improvement of European life insurance markets

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  • David Cummins, J.
  • Rubio-Misas, María

Abstract

This paper provides evidence of the role that financial market development and institutional quality play in the integration of European Union (EU) life insurance markets. It analyzes ten EU life insurance markets over a seventeen-year sample period. The meta-technology cost/revenue efficiency ratios, estimated under the meta-frontier DEA framework, are used as a measure of integration and the analysis is conducted by applying Tobit panel regression models. We find that national stock market development and institutional quality enhance cost performance and integration of EU life insurance markets. Results also show that in countries where bancassurance is the main life insurance distribution channel, banking sector development contributes to integration in terms of revenue efficiency. However, we find that better outcomes in national institutional quality decrease the meta-technology revenue efficiency ratio, suggesting that life insurance prices are lower in countries with better institutions.

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  • David Cummins, J. & Rubio-Misas, María, 2021. "Country factor behavior for integration improvement of European life insurance markets," Economic Analysis and Policy, Elsevier, vol. 72(C), pages 186-202.
    • Handle: RePEc:eee:ecanpo:v:72:y:2021:i:c:p:186-202
    DOI: 10.1016/j.eap.2021.08.004
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    3. Li, Xiaolong & Ozturk, Ilhan & Ullah, Sana & Andlib, Zubaria & Hafeez, Muhammad, 2022. "Can top-pollutant economies shift some burden through insurance sector development for sustainable development?," Economic Analysis and Policy, Elsevier, vol. 74(C), pages 326-336.

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    More about this item

    Keywords

    Integration; Financial market development; Institutional quality; EU life insurance markets;
    All these keywords.

    JEL classification:

    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies

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