Determinants of life insurance consumption across countries
AbstractThe importance of life insurance companies as part of the financial sector has significantly increased over the past decades, both as provider of important financial services to consumers and as a major investor in the capital market. However, the authors still observe a large variance in life insurance consumption across countries, which raises the question of its determinants. The authors use a greatly expanded data set on life insurance consumption to examine the determinants of the demand and supply of life insurance products across countries and over time. Using a cross-sectional sample of 63 countries averaged over 1980-96, the authors find that educational attainment, banking sector development, and inflation are the most robust predictors of life insurance consumption, while income is only a weak predictor. The results on educational attainment and inflation are confirmed in a panel of 23 countries over the period 1960-96. The results strengthen the case for promoting price stability, financial sector reform, and an efficient education system if life insurance and its many benefits are to be fully realized in an economy.
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Bibliographic InfoPaper provided by The World Bank in its series Policy Research Working Paper Series with number 2792.
Date of creation: 28 Feb 2002
Date of revision:
Payment Systems&Infrastructure; Non Bank Financial Institutions; Health Economics&Finance; Insurance&Risk Mitigation; Environmental Economics&Policies; Health Economics&Finance; Insurance&Risk Mitigation; Environmental Economics&Policies; Non Bank Financial Institutions; Contractual Savings;
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