Determinants of Life Insurance Consumption across Countries
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World Bank, Washington, DC
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The 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.
Palabras clave
LIFE INSURANCE, CROSS-COUNTRY EXPERIENCE, INSURANCE COMPANIES, FINANCIAL SERVICES, CROSS SECTION ANALYSIS, EDUCATIONAL ACHIEVEMENT, BANKING SYSTEMS, INFLATION RATES, PRICE STABILIZATION, FINANCIAL SECTOR REFORM, EDUCATIONAL EFFICIENCY ANNUITIES, ANNUITY, BENEFICIARIES, BUDGET CONSTRAINTS, CAPITAL MARKETS, CONSUMERS, CONTRACTUAL SAVING, COVERAGE, CPI, DEVELOPED COUNTRIES, DEVELOPMENT INDICATORS, DISINTERMEDIATION, DIVIDENDS, ECONOMIC DEVELOPMENT, ELASTICITIES, EMPIRICAL ANALYSIS, EXCHANGE RATE, EXCHANGE RATES, EXPENDITURES, FINANCIAL INSTITUTIONS, FINANCIAL MARKETS, FINANCIAL SECTOR, FINANCIAL SERVICES, FRAUD, GNP, GROSS NATIONAL PRODUCT, INCOME, INCOME DISTRIBUTION, INFLATION, INFORMAL INSURANCE, INSURANCE COMPANIES, INSURANCE CONTRACTS, INSURANCE COVERAGE, INSURANCE INDUSTRY, INSURANCE MARKETS, INSURANCE POLICIES, INSURANCE PREMIUM RATES, INSURANCE PRODUCTS, INSURERS, INTEREST RATES, LIFE EXPECTANCY, LIFE INSURANCE, LIFE INSURANCE COMPANIES, LIFE INSURANCE PREMIUMS, LIFE INSURERS, MORTALITY, OVERHEAD COSTS, POLICY MAKERS, POLICY RESEARCH, PRESENT VALUE, PRIVATE INSURANCE, PRIVATE SECTOR, PROPERTY RIGHTS, PUBLIC EXPENDITURES, PURCHASING POWER, RATES, RETIREMENT SAVINGS, RISK AVERSION, RISK INSURANCE, RISK MANAGEMENT, SAVINGS, SOCIAL SECURITY, UNDERWRITING