Examining the determinant factors affecting the sale of life insurance

Today, the insurance industry is one of the major economic institutions. Insurance, on the one hand, is a financial institution that plays an essential role in strengthening the economic fabric of the community, and on the other hand, by providing security and certainty, the scope for the expansion of productive activities. Meanwhile, life insurance is very important for all types of insurance. Because in life insurance, the length of the insurance is often more than one year, and even includes, in some cases, the life of the insurer. The objective of the current research is to study the impact of economic risks (depression, inflation, lowering the bank interest rates) on the sales of life insurances where the economic risks are initially measured through ARCH-GARCH family models and then the intensity of the impact of the economic risks are examined and determined on the sales of life insurances. In this regard, the type of research was correlation-causal and in terms of the nature and time it is considered to be practical and cross-sectional, respectively. In this research, time series data were used on the economic risks and the sales of the life insurances and they were used for the time period 1971 through 2015. The results showed that: A) Based on instantaneous response functions, by creating a positive shock equal to one standard deviation in the economic risks, the percentage of the sales of life insurances starts to decrease from the first year. As a result, increases in the economic fluctuations lead to decreases in the sales of life insurances. B) Variance analysis functions show that variables of inflation rates, gross domestic product, and interest rate fluctuations account for 0.56%, 1.33%, and 2.1% of the error variance for the sales of life insurances, respectively. C) Economic risks (depression, inflation, lowering the band interest rates) have significant impacts on the sales of life insurances.