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The S-curve and Reality

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  • Giovanni Millo

    () (Generali S.p.A.)

Abstract

We challenge the common wisdom that the income elasticity of insurance is higher, ceteris paribus, in developing countries (the so-called S-curve hypothesis). Focusing on non-life insurance, we show that the available evidence is contradictory and heavily dependent on methodology. Based on a recent approach to consistent inference on the income elasticity of insurance, we show counterexamples to the theory. Although not supporting it in general, we argue that it could still be relevant for explaining the behaviour of particular lines of business.

Suggested Citation

  • Giovanni Millo, 2016. "The S-curve and Reality," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 41(4), pages 608-625, October.
  • Handle: RePEc:pal:gpprii:v:41:y:2016:i:4:d:10.1057_s41288-016-0003-6
    DOI: 10.1057/s41288-016-0003-6
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    References listed on IDEAS

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    Keywords

    insurance; income elasticity; S-curve;

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