Abstract
PurposeIn this paper, we aim to assess insurance demand across selected Asian and OECD countries during the period of the global financial crisis.Design/methodology/approachWe collected data from 55 emerging Asian and OECD countries during the period of the global financial crisis. Our methodology relies on panel regressions. Separate models are run for the Asia/OECD economies and a follow-up distinction between high/low-income regions is also made.FindingsWe find that global financial crisis affects negatively the general insurance demand particularly in high-income region. Higher dependency ratio in Asia tends to decrease insurance demand, whereas education in case of Asia positively influences insurance demand indicating that higher literacy rate can be helpful to capture the potential customers. Our results further reveal that life insurance is an important driver for insurance demand in OECD countries, whereas general insurance demand is higher in the Asian economies.Research limitations/implicationsA limitation of this study is that data sets employed do not differentiate between different life and general insurance products.Practical implicationsThis study is helpful for regulators, policymakers and insurance providers to evaluate, assess and monitor insurance demand in relevant countries.Originality/valueThis is one of the pioneering studies that have assessed insurance demand among emerging Asian and OECD countries during the period of the global financial crisis.Peer reviewThe peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-08-2019-0523
Highlights
Insurance exhibits an important contribution to sustainable economic development and growth especially by pooling the public funds and acting as an institutional investor for the corporate sector
The economic and demographic factors descriptive shows that GDP per capita income, financial developments, life expectancy, urbanization and education are higher in OECD region in comparison to Asia
The global financial crisis has had an adverse impact on financial sectors worldwide and led to the partial collapse and/or downsizing in banking and insurance sectors
Summary
Insurance exhibits an important contribution to sustainable economic development and growth especially by pooling the public funds and acting as an institutional investor for the corporate sector. Insurance can trigger economic activities and affect social welfare through proper allocation/disbursements of funds, loss payments and indemnification for longer period of time (Outreville, 1990; Brown, 2000; Park & Lemaire, 2012). In 2007, Europe was in the lead of the insurance market with a market share of 42.48% followed by American region with a market share of 34.21%, Asia with 20.35% and Africa with 1.66%. By 2014, the European market share had declined to 35.53%, followed by similar drops in the American region (down to 33.36%) and Africa (down to 1.44%). At the same time period the Asian insurance market share has risen to 27.57%. OECD market share was 89.84% in 2007 but reduced to 80.59% in 2014 (Swiss-Re, 2015)
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