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Financial Inclusion and Life Insurance Demand; Evidence from Italian households

Author

Listed:
  • Elisa Luciano

    (University of Turin and Collegio Carlo Alberto)

  • Mariacristina Rossi

    (University of Turin and CeRP-Collegio Carlo Alberto)

  • Dario Sansone

    (Georgetown University)

Abstract

This paper studies the demand drivers for life insurance, both lump sum and annuity, using the Bank of Italy (SHIW) panel dataset 2004-2012. We consider both participation and invested amounts. We use stock market participation, home ownership and financial literacy as measure of financial market inclusion. We find that financial inclusion stands as the pivotal regressor in shaping life insurance demand, especially annuities, even when we include pension funds in the definition of annuities. Instead, except gender, the traditional drivers of insurance demand, such as income, wealth, geographical or sociological variables, have a lower impact than financial inclusion. These results are robust to the inclusion of time and individual fixed effects, as well as the IV approach to tackle the potential endogeneity of financial inclusion.

Suggested Citation

  • Elisa Luciano & Mariacristina Rossi & Dario Sansone, 2016. "Financial Inclusion and Life Insurance Demand; Evidence from Italian households," CeRP Working Papers 156, Center for Research on Pensions and Welfare Policies, Turin (Italy).
    • Handle: RePEc:crp:wpaper:156
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    File URL: http://www.cerp.carloalberto.org/wp-content/uploads/2016/01/WP_156.pdf
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    Cited by:

    1. Jiang Cheng & Lu Yu, 2019. "Life and health insurance consumption in China: demographic and environmental risks," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 44(1), pages 67-101, January.
    2. Giuseppe Marotta, 2018. "Why choosing dominated personal pension plans: sales force and financial literacy effects," Centro Studi di Banca e Finanza (CEFIN) (Center for Studies in Banking and Finance) 0072, Universita di Modena e Reggio Emilia, Dipartimento di Economia "Marco Biagi".
    3. Chu-Shiu Li & Gene C. Lai & Saruultuya Tsendsuren & Richard J. Butler & Chwen-Chi Liu, 2023. "Cognitive abilities and life insurance holdings: evidence from 16 European countries," The Geneva Risk and Insurance Review, Palgrave Macmillan;International Association for the Study of Insurance Economics (The Geneva Association), vol. 48(1), pages 110-166, March.
    4. Marotta, Giuseppe, 2020. "Behind the success of dominated personal pension plans: sales force and financial literacy factors," Journal of Pension Economics and Finance, Cambridge University Press, vol. 19(4), pages 532-547, October.

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