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Insurance demand: a historical long-run perspective (1850–2020)

Author

Listed:
  • Sebastian Kohl

    (Freie Universität Berlin)

  • Matthias Römer

    (Freie Universität Berlin)

Abstract

Existing research on how international insurance demand varies with income is largely driven by cross-sectional variation post-1970. Drawing on newly collected historical long-run data on life insurance premiums starting as early as 1850 to 2020 for 20 OECD countries, we evaluate the ‘S-Curve’ predicting insurance demand as each country transitions through different income levels. In contrast to predictions in the literature, we reject the ‘S-curve’, but identify a two-bump curve with two high-elasticity episodes, one driven by a massive expansion of life insurance contracts at the end of the 19th century to ensure mortality risks and the other in the late 20th century driven by a shift to savings products. This could imply that the longitudinal catching-up process of countries with low insurance density may be steeper than what the cross-sectional ‘S-Curve’ would suggest.

Suggested Citation

  • Sebastian Kohl & Matthias Römer, 2025. "Insurance demand: a historical long-run perspective (1850–2020)," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 50(3), pages 595-618, July.
    • Handle: RePEc:pal:gpprii:v:50:y:2025:i:3:d:10.1057_s41288-024-00339-8
    DOI: 10.1057/s41288-024-00339-8
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