The Economic Attractiveness of Life Insurance Products: Comparative Analysis

The study analyzes indicators, that contribute insurance market growth. In order to identify the main drivers of such growth the research, conducted within this paper, includes data on 11 countries - Belgium, Germany, Estonia, Poland, Hungary, Latvia, Australia, Austria, Iceland, Russia and the US - over period 2001 - 2014. The model, based on the panel data, includes logarithm of the value of insurance premiums as a dependent variable, and economic and demographic variables as explanatory variables. Crucial economic indicators are: annual government 10-year government bond and annual deposit rate and controls variables are: CPI, GDP growth, real interest rate, logarithm of GDP per capita and health expenditures per capita. GMM estimates are the most effective, comparing to OLS, GLS and TSLS estimates, so the choice was made in favor of the Arellano-Bond model. According to the results, expected impact of government bond yields on dependent variable was not confirmed. Expectations about the negative relationship between the deposit rate and the insurance premiums was confirmed: the variable is statistically significant in the current and prior periods, but the effect in the period t-1 is positive.