Economic transition and insurance market development: evidence from post-communist European countries

Abstract

We evaluate the development of insurance markets in 18 post-communist European countries over a 10-year period. In doing so, we estimate static and dynamic models to test the relationship between economic transition indices and insurance density and penetration. Results suggest that licensing and trade practices, monetary stability, consumer protections, and government transfers are relevant to property–casualty and life–health insurance consumption. The findings have implications for policymakers aiming to increase insurance coverage in post-communist countries. Additionally, the research underscores the importance of accounting for economic policies and institutions in studies of insurance market development.