Insurance Market Research Articles

Trends in Gender Disparities in Life Insurance Coverage in India

This study explores gender disparities in the life insurance sector in India, focusing on policy ownership, women's participation in marketing, and regional variations. Despite significant growth in the sector, women remain underrepresented in both policyholders and the workforce. Using data from the Insurance Regulatory and Development Authority of India (IRDAI), the study examines trends from 2018–2023, revealing that while the proportion of women purchasing policies has increased, men still dominate the sector. The research also highlights regional variations, with states like Karnataka and Kerala showing higher female participation due to better literacy rates and targeted marketing. Furthermore, women’s involvement in life insurance marketing is increasing, especially among private insurers, who are adopting gender-sensitive recruitment practices. However, Life Insurance Corporation (LIC) has seen a decline in female workforce participation, suggesting a need for structural changes. The study recommends policy interventions, such as financial literacy campaigns and gender-specific products, to close the gender gap in life insurance. By addressing these disparities, the life insurance sector can contribute to financial inclusion and women’s empowerment in India

Insurtech strategies: a comparison of incumbent insurance firms with new entrants

AbstractInsurtech is closely associated with digital transformation by new entrants that seek to disrupt insurance markets. However, the insurtech concept also includes its use by incumbent insurance companies, which are actively deploying a wide variety of insurtech applications to protect their market positions through innovation of their existing business models, e.g. through improved business processes or new insurance services. A theoretical insurtech business innovation model is developed that captures the effects of digital technology in insurance markets by considering innovation as a multi-dimensional concept that encompasses business processes, novel insurance products and changes to the insurance value chain. This framework is applied to an empirical sample of digital leaders: three incumbents and four new entrants. The results illustrate a variety of insurtech applications that include the transformation of business processes, products and new types of value chain configuration, as well as relatively minor enhancements to existing systems and business practices. It is shown that all the new entrants exploit artificial intelligence, big data and digital technology to build brand-new insurance services that emphasise innovative product features, high customer value and a delightful customer experience. In contrast, the legacy insurance firms tend to use digital technology in a defensive manner, e.g. the enhancement of existing insurance services, distribution channels and market positions. The exception is the launch of a telematics insurance service by an incumbent firm, where the telematics insurance effectively operates as a standalone business within a legacy insurance firm. The theory model is effective at analysing and evaluating both the type and magnitude of innovation. The case studies make an empirical contribution by illustrating state-of-the-art innovation by insurance disruptors and contrasts this with the defensive and sometimes novel digital strategies of incumbent firms. Future trends and research opportunities are outlined.

Investment Portfolio Allocation and Insurance Solvency: New Evidence from Insurance Groups in the Era of Solvency II

This study examines the effect of the investment portfolio structure on insurers’ solvency, as measured by the Solvency Capital Requirement ratio. An empirical sample of 88 EU-based insurance groups was analyzed to provide robust evidence of the portfolio’s impact on the Solvency Capital Requirement ratio from 2016 to 2022. Linear regression and supervised machine learning models, particularly extra trees regression, were used to predict the solvency ratios, with the latter outperforming the former. The investigation was supplemented with panel data analysis. Firm-specific factors, including, unit-linked and index-linked liabilities, firm size, investments in property, collective undertakings, bonds and equities, and the ratio of government bonds to corporate bonds and country-specific factors, such as life and non-life market concentration, domestic bond market development, private debt development, household spending, banking concentration, non-performing loans, and CO2 emissions, were found to have an important effect on insurers’ solvency ratios. The novelty of this research lies in the investigation of the connection of solvency ratios with variables that prior studies have not yet explored, such as portfolio asset allocation, the life and non-life insurance market concentration, and unit-linked and index-linked products, via the employment of a battery of traditional and machine enhanced methods. Furthermore, it identifies the relation of solvency ratios with bond market development and investments in collective undertakings. Finally, it addresses the substantial solvency risks posed by the high banking sector concentration to insurers under Solvency II.

Electricity-Caused Wildland Fires: Costs, Social Fairness, and Proposed Solution

If electric power is distributed by an overhead network of cables, the ignition of wildland fires is unavoidable, although prudent management efforts can reduce the losses. The economic aspects of these fires are driven by tort litigation, which tends to create serious problems of social fairness. The present system does not contain adequate incentives towards minimizing these costs, nor appropriate measures to ensure that costs are allocated in a fair manner. The problems are universal, but a specific focus on the wildfire situation in California is assumed. The electric utilities there are regulated by the California Public Utilities Commission, and the regulations are almost wholly prescriptive. Striking is the absence of any benefit/cost considerations in the regulation of utilities. Regulations have also created distortions in the insurance market, notably subsidizing fire-unsafe behaviors. The legal and regulatory system should be changed to promote fire-safe behaviors. It should also be changed to more fairly apportion the cost burdens. A strategy which should be adopted more widely is that of Public Safety Power Shutoffs. The optimal solution is to enact legislation to create a no-fault system, similar to Workers’ Compensation. In such a system, tort-based liability litigation is replaced by a system which provides basic compensation to wildfire victims, irrespective of the cause and associated fault. However, reform of insurance regulation and zoning are also required.

Insurability and government-funded mitigation: safer but costlier

AbstractHurricanes significantly harm homeowners through physical damage and long-term financial strain due to rising insurance costs, property value loss, and repair expenses. This paper focuses on the interrelated decisions of the government mitigation funding of residential acquisitions and retrofit subsidies and of price restrictions on the insurance market in eastern North Carolina to determine the financial effects on stakeholders. The introduction of these policy interventions have impacts that propagate through the system due to risk adjustments, homeowner take-up behaviour, and insurer profit-maximising behaviour. This study uses an integrated game theoretic model to demonstrate that there are cost-effective government spending levels that reduce residential loss from hurricane damage. When insurance prices are capped at preintervention levels, the number of households and their distribution of losses, which has been altered through mitigation, leads to increased insurer insolvency. When insurance prices are allowed to adjust after mitigation, some homeowners find insurance is no longer affordable. This highlights the tradeoff between ensuring insurer stability and expanding homeowner insurance accessibility.

Evolution and Challenges of Insurance Industry in Hong Kong: From a Backward Investment Channel to a Leading Financial Product

The objective of the study is to explore the growth trajectory of Hong Kong's insurance industry and its changing position in the financial market, this study uses historical literature analysis, market data analysis, and case studies to conduct an in-depth investigation of the development of Hong Kong's insurance industry from the 1980s to the present. The study found that the Hong Kong insurance industry has experienced a transformation from a marginal investment channel to a core financial product, and the product attributes have also undergone significant changes with market demand and technological progress. The analysis shows that the growth of the individual life insurance market is mainly driven by factors such as increased consumer awareness, market policy support, and stable economic environment. However, the study also identified challenges facing the industry, such as market saturation, regulatory changes, and declining consumer trust. Based on these findings, it is recommended to adopt diversified product strategies, strengthen consumer education, and improve service quality to maintain the vitality and sustainability of Hong Kong's insurance industry. The results of this study not only reveal the evolution law of the insurance industry, but also have important theoretical and practical significance for promoting the realization of financial freedom, enhancing industry competitiveness, and formulating future market strategies.

Today’s Insurance Market and Prospects of Digital Insurance

Russian insurance market has adapted to macro-economic and geo-political situation and now can be characterized by stable and sustainable development. The article studies today’s development of insurance market, identifies prospects of insurance service digitalization and analyzes digital maturity of insurance companies. The author advanced his own approach to finding ways of transforming insurance business with regard to global goals of insurance market development. A conclusion was drawn that digital technologies in insurance are essential for the efficiency of the finance system, as they foster the development of insurance market and improve quality of insurance services. By analyzing digital insurance the author highlighted the importance of further introduction of digital technologies in insurance industry in order to upgrade quality of insurants’ protection and develop insurance market in conditions of digital economy.

Pooling and repooling risk: The limits of Insurtech platforms in inclusive insurance

Abstract This article investigates the promise of Insurtech to expand the frontier of the insurance market to include vulnerable populations around the world. It contributes to current debates on the proliferation of new technologies for financial inclusion as embedded in contemporary forms of platform-based capitalism. We argue that Insurtech’s promises fall short of expectations because of the contradiction between the principles of platform scalability and insurance risk pooling. Such contradictions lead Insurtech platforms to unpool risk rather than provide innovative technologies to pool it. This ultimately limits the expansion of markets for inclusive insurance as Insurtech platforms struggle to scale up the market through their supposedly disruptive technology. Our analysis draws on a range of regulatory reports, complemented by in-depth interviews with Insurtech executive officers. The article offers insights into the contradictory principles currently driving the digital inclusive insurance market, as well as the limits to the ongoing global expansion of platform capitalism.

Cream Skimming and Technological Innovations in Automobile Insurance Market

Abstract This study examines the effect of telematics devices on the automobile insurance market. Automobile insurance using these devices is marketed as pay-how-you-drive (PHYD) automobile insurance. Insurers can directly monitor the insured’s vehicle for risky driving behaviors such as speeding. Some of insureds receive discounts on their premiums for driving more cautiously. On the other hand, accumulating the insured’s driving skills, insurers may be able to only sign up insureds with low accident rates, widely known as cream skimming. By applying Hodgson (2014. “Adverse Selection in Health Insurance Markets: A Classroom Experiment.” The Journal of Economic Education 45 (2): 90–100), we tested whether PHYD programs makes it easier for insurers to contract with low-risk drivers. Repeated cream skimming suggests that only high-risk drivers remain in the market and a residual market cannot be established, which could lead to adverse selection and market failure in the absence of any regulations. However, the experiment revealed that low-risk but highly risk-averse subjects tend to dislike the fluctuation in premiums by enrolling in PHYD programs. The results could be effective in future regulatory construction.

THE INSURANCE MARKET IN ROMANIA – MOTOR THRID PARTY LIABILITY INSURANCE: COMMUNICATION ON DEVELOPMENTS, RISKS, CHALLENGES AND PERSPECTIVES

The risks faced by the Romanian insurance market are significant and come from both the difficult global context and the internal dynamics. Paradoxically, however, the underdevelopment of the market, especially in the life insurance sector, and the dependence on the mandatory insurance type RCA, reduce the exposure of Romanian insurance companies to some risks, such as a fall in income or an increase in interest rates. In this context, the paper aims to make an estimate of the risks and challenges in the RCA insurance market for the coming years starting from a series of official data for these mandatory policies from 2019-2023. We find that compulsory car insurance stands out as a bright spot, comprising over 45% of total premiums. A small number of companies dominate the market, with the top 10 controlling roughly 60%. In the compulsory car insurance sector, there's a mix of growth and decline: voluntary premiums are rising, but the number of contracts is falling. Despite fewer claims, the average cost per claim has increased compared to the previous year. Overall, the results suggest that the dependence on mandatory insurance like RCA paradoxically shields Romanian insurance companies from certain risks.

Service Quality in Voluntary Property Insurance: A SERVQUAL-Based Approach for Poland and the USA

This study investigates the evolving dynamics of service quality in the voluntary property insurance market, focusing on the integration of Polish and USA insurance companies within their respective internal and external environments. The primary aim is to evaluate the competitiveness of this market from the perspective of individual clients, with a specific emphasis on improving service quality. Employing a SERVQUAL-based framework, this research diagnoses key factors influencing service excellence and explores the processes involved in enhancing the quality of voluntary property insurance services in both Poland and the USA.A key achievement of this work is the comprehensive analysis of literature, identifying definitional criteria and conceptual underpinnings related to service quality improvement. The findings highlight potential areas for action and unresolved issues in the ongoing efforts to elevate the standards of property insurance services. As a result, a novel model for improving the quality of insurance services has been developed and described. This model introduces a new perspective on service quality, offering new tools for measuring, analysing, and assessing the improvement process. The study provides valuable insights into service quality enhancement, offering a practical, research-driven framework that insurers and policymakers can leverage for advancing customer service standards in voluntary property insurance.Copyright© 2024 The Author(s). This article is distributed under the terms of the license CC-BY 4.0., which permits any further distribution in any medium, provided the original work is properly cited.

Insurance market development and economic growth in Africa: Contingencies and thresholds of structural transformation

Despite insurance contributions to economic growth, the intervening role of structural transformation on the insurance-growth nexus remains scarce, leaving a gap in the literature. Motivated by the 2030 Sustainable Development Agenda, which envisages higher structural transformation, financial development and economic progress, this study examines the threshold effects and the joint impact of insurance and structural transformation on economic growth in Africa. The study employed the generalised method of moments and dynamic panel threshold estimations on 38 countries covering 2008 to 2020. The following findings emerge: First, insurance and structural transformation promote economic growth. Second, the results indicate that structural transformation enhances the impact of insurance on economic growth. This suggests that structural transformation matters in driving insurance market development, ultimately promoting economic growth. Third, the empirical evidence further reveals nonlinearities in the relationship and presents that a high level of insurance penetration stimulates growth and vice versa. More so, the synergistic effect of insurance and structural transformation on economic growth is more substantial at higher threshold levels. This implies that though insurance spurs economic growth, its impact is more effective through the intervening role of a strong structural transformation. Therefore, this study calls for government intervention and policies to improve structural transformations and form insurance synergies to promote growth.

Methodical aspects of analysis and risk management of an insurance company

The object of research is the risks of the insurance company. The paper is devoted to the study of the risks of the insurance company, which generate threats to the level of its solvency. The general state of economic development in general and the insurance market in particular determine the operating conditions of any insurer. The insurance company's ability to regulate such conditions is limited, but the formation of a stable state of the internal environment creates opportunities to adapt to threats from the external environment. Timely detection of potential risks in the activities of the insurer, provision of reserves to cover possible losses related to risks, enable companies to overcome the consequences of risks with minimal losses. The methodical basis for evaluating potential risks in the insurance company's activities is strategic analysis methods, such as PEST and SWOT analysis. Their results give an idea of the state of threats in the external environment and the potential opportunities of the insurer's internal reserves. The methods of economic-mathematical modeling and forecasting make it possible to assess the current state of the company and investigate its behavior under the influence of external and internal factors. The basis of the forecast model of risk analysis of an insurance company is formed by the coefficient of risk of loss of solvency, calculated according to the key parameters of the assessment of its financial condition. The reliability of the forecast of the possible risk of loss of the insurer's solvency is ensured by constructing a trend line and forming a forecast sheet in the MS Excel software environment. The forecast sheet forms the probabilities of the values of the indicators with a distinction between optimistic and pessimistic levels of the forecast. Using the trend line and finding the value of the coefficient of determination (R2), the probability of realizing the forecast of growth or reduction in the value of each individual parameter of the model is determined. The practical significance of the obtained results lies in the possibility of increasing the efficiency of the use of available resources and reserves in the process of risk management. The proposed methodical approach can be used to assess the impact of risks in the insurer's activities, which will increase the accuracy of the obtained results.

Identification of Heterogeneous Consumer Groups in Insurance Markets: Latent Class Analysis

Identification of Heterogeneous Consumer Groups in Insurance Markets: Latent Class Analysis

One size does not fit all: The value of information and coexistence of rating agencies

AbstractThis study investigates the production of information by multiple rating agencies and the selection of rating agencies when the value of information to buyers is heterogeneous. We argue that firms strategically choose a rating agency based on the value of information. Not only can a rating agency with a finer rating scheme than a dominant agency offer information to the market, but an agency with a coarser scheme can also provide information by serving low‐information‐value users and sellers who could not obtain a rating otherwise. This does not necessarily result in rating shopping. We tested these hypotheses using the U.S. property‐casualty insurance market, examining insurers' rating agency selections among AM Best, Demotech, and S&P. Our results indicate that the value of information to users influences both the design of rating schemes by rating agencies and the selection of rating agencies by firms. The coexistence of multiple rating agencies with different rating schemes suggests their ability to serve heterogeneous information clienteles.

STATE REGULATION OF REINSURANCE ACTIVITIES IN UKRAINE DURING THE WAR

This paper examines the evolution of state regulation of reinsurance activities in Ukraine in the period 2022-2024, with a particular focus on the impact of the ongoing conflict with Russia. This paper examines the manner in which the regulatory framework has been adapted to the distinctive challenges posed by the war in order to stabilise the insurance market and ensure effective risk management. The objective of this study is to analyse the regulatory measures and their implications for the insurance and reinsurance sectors, with a particular focus on the changes implemented, their practical results and the broader implications for market stability. The primary objective of this paper is to undertake a comprehensive analysis and evaluation of the alterations in state-level regulation of reinsurance in Ukraine between the years 2022 and 2024. The objective is to identify the regulatory changes implemented to address the distinctive challenges posed by wartime conditions, evaluate their impact on the reinsurance industry, and discuss the broader economic implications. The study aims to provide a comprehensive understanding of the manner in which the regulatory framework has been adjusted in order to maintain industry stability and ensure effective risk management in an unstable environment. Methodology. This study employs a qualitative research methodology, utilising a combination of document analysis and expert interviews. The data was gathered from regulatory reports, policy documents, and statements issued by the National Bank of Ukraine and other pertinent authorities. The analysis is centred on a detailed examination of the key regulatory adjustments, the market responses to these changes, and the practical implications of these modifications. Results. The analysis revealed several significant changes in the reinsurance regulation in Ukraine during the reporting period: 1) strengthening of regulatory supervision; 2) revision of coverage requirements; 3) state and international financial support measures and co-operation with international reinsurers to stabilise the market and manage increased risks. The regulatory changes have had several practical implications for the reinsurance sector: increased financial stability through stronger solvency and capital requirements has improved the financial strength of insurers and reinsurers, helping them to manage the increased risks associated with the conflict. Value / Originality. This paper presents a comprehensive analysis of the regulatory adaptations in Ukraine's reinsurance sector during a period of significant political and economic upheaval. The paper offers valuable insights into the effective adjustment of state regulation in response to extraordinary circumstances, thereby contributing to the broader understanding of risk management in conflict-affected regions. The study is of particular relevance in the context of the prevailing geopolitical circumstances and the necessity to comprehend the manner in which extreme circumstances affect financial regulations. The study addresses a gap in the existing literature on crisis management in the financial sector, with a particular focus on the context of war. The originality of this study lies in its focus on the intersection of war and regulatory adaptation, a topic that has been largely overlooked in the existing literature. By analysing the regulatory responses and their outcomes, the paper makes a contribution to the development of strategies for effective crisis management in the financial and insurance sectors.

Analisis Implementasi Strategi Pemasaran Asuransi Pendidikan Mitra Iqra Plus Dalam Kajian Asuransi Syariah

Atika Andriani1, Sri Ramadhani, Rahmat Daim Harahap2 1 FEBI UIN Sumatera Utara, Indonesia atikaandriani98@gmail.com1, Sriramadhani@gmail.com2, rdainharahap@uinsu.ac.id3 ABSTRACT Mitra Iqra Plus is one of the products owned by PT. Bumiputera Sharia Life Insurance, KPS Medan, which aims to help fund children's education. The purpose of this study was to determine the implementation of Mitra Iqra Plus' educational insurance marketing strategy in the study of sharia insurance at PT Asuransi Jiwa Syariah Bumiputera, KPS Medan, the application of sharia principles in the implementation of marketing life insurance products at PT Asuransi Jiwa Syariah Bumiputera, KPS Medan, and challenges in implementing sharia. marketing conducted by PT Asuransi Jiwa Syariah Bumiputera, KPS Medan. This type of research uses qualitative research. Data collection techniques in the form of interviews, observations, and documentation. The data analysis technique used is to reduce the data, present the data, then draw conclusions. The results show that PT Asuransi Jiwa Syariah Bumiputera, KPS Medan implements according to sharia marketing principles starting from Wisdom (Strategy), Needs (Needs), Halal (Tayyibat), Welfare (Falah), Mutual Consent. The inhibiting factors in implementing the Mitra Iqra Plus educational insurance marketing strategy are the lack of public knowledge about sharia insurance, lack of public trust in sharia insurance, lack of agents and customers who are difficult to collect for premium payments. The challenge is the lack of technology development, the weak market share of PT. AJS Bumiputera due to lack of support from the government and the community. Keywords: Implementation of Sharia Marketing Strategy, Mitra Iqra Plus, Sharia Insurance.

Comparative Study of XGBoost, Random Forest, and Logistic Regression Models for Predicting Customer Interest in Vehicle Insurance

In today’s competitive insurance market, accurately predicting customer interest in additional products, such as vehicle insurance, is crucial for optimizing marketing strategies and maximizing sales. This study presents a comparative analysis of three machine learning models such as XGBoost, RandomForest, and Logistic Regression to predict customer interest in vehicle insurance based on a dataset that includes demographic, vehicle, and policy-related features. The dataset was analyzed using five-fold cross-validation, and the performance of the models was evaluated using AUC-ROC, precision, recall, and F1-score. XGBoost demonstrated the highest recall (0.9525) and AUC-ROC (0.7854), making it the most effective model for identifying customers interested in vehicle insurance, though at the expense of lower precision (0.2585). RandomForest showed a more balanced trade-off between precision (0.3064) and recall (0.5341) but performed lower overall. Logistic Regression, while the most interpretable model, exhibited high variability in performance across different folds, with a lower average precision (0.2372). The findings of this research highlight that XGBoost is ideal for maximizing recall in high-volume campaigns, while RandomForest may be better suited for applications requiring fewer false positives. These results offer valuable insights into model selection based on business objectives and resource allocation.

Labor market participation in people with intellectual disability – a follow-up study in Sweden

Abstract Background Work is vital to people’s health and quality of life. The Convention on the Rights of Persons with Disabilities affirms the right to work on an equal basis with others including an opportunity to earn a living by work, but evidence shows that people with intellectual disability (ID) are at greater risk of unemployment and social exclusion. Due to the lack of comprehensive data for longitudinal follow-ups, information on long-term labor market participation (LLMP) in people with ID is scarce. This study aimed to investigate factors of importance for LLMP in individuals with ID in Sweden. Methods The study was based on data from the upper secondary school for pupils with ID between 2001 and 2020 (N = 26,905) and from the longitudinal integrated database for health insurance and labor market studies. A sample of gainfully employed in 2011 (n = 2,719), was followed with respect to LLMP until 2020. Odds ratios (ORs) with 95% confidence intervals (CI) for associations between educational, sociodemographic, and work factors and LLMP (i.e. gainful employment throughout the follow-up), were estimated stratified on sex. Results LLMP was twice as likely in men compared with women, OR 2.06 (1.78-2.58) as was work in the private sector. Factors of significance for LLMP in men and women alike were: completed national education program, OR 3.40 (3.06-3.86) and OR 2.91 (2.40-3.54), parents’ education; compulsory school in mothers’, OR 1.22 (1.06-1.41) and 1.24 (1.00-1.55) and in fathers’ OR 1.35 (1.17-1.56) and 1.49 (1.20-1.85), while municipality of residence was significant only in men, OR 1.30 (1.10-1.56). Conclusions Public health prevention for disadvantaged groups requires accurate and up-to-date knowledge. Using unique register-based data, this is the first study on LLMP in people with ID in Sweden. Knowledge on what social determinants may strengthen LLMP is important since limited LLMP increases the risk of missing out on health benefits that employment may offer. Key messages • There was a significant gender difference in long-term labor market participation in people with intellectual disability in Sweden. • There is a need for increased knowledge on what social determinants may strengthen long-term labor market participation in people with intellectual disability.

Insurance Markets Risk Affects Global Reinsurance Market Risk? Evidence from USA and Europe Insurance Markets

Insurance Markets Risk Affects Global Reinsurance Market Risk? Evidence from USA and Europe Insurance Markets