Statistics Papers

Document Type

Technical Report

Date of this Version

11-2012

Publication Source

ASTIN Bulletin: The Journal of the IAA

Volume

42

Issue

2

Start Page

501

Last Page

527

Abstract

Regression techniques are applied to an unbalanced panel data that includes 68 countries observed over a ten-year period, to explore the factors that affect non-life insurance demand across nations. While previous literature has discovered several significant economic, demographic, and institutional variables, little attention has been devoted to cultural dimensions. We find that non-life insurance consumption is adversely impacted in countries where a large fraction of the population has Islamic beliefs. Also highly significant are three of the cultural scores developed by Hofstede in a celebrated study: Power Distance, Individualism, and Uncertainty Avoidance. An important finding is that culture impacts non-life insurance more in affluent countries, with an adjusted R-square coefficient increasing by 11.7%, than in developing countries where the R-square coefficient increase due to cultural impacts is only 1.2%. These results have implications for multinational insurers seeking to enter a new market. Ceteris Paribus, these insurers should target countries, and population segments within these countries, that exhibit low Power Distance, and high Individualism and Uncertainty Avoidance scores.

Copyright/Permission Statement

This article has been published in a revised form in ASTIN Bulletin: The Journal of the IAA - https://www.cambridge.org/core/journals/astin-bulletin-journal-of-the-iaa/article/the-impact-of-culture-on-the-demand-for-non-life-insurance/60521B67FD1E7243195E4C69F31726E5.

This version is free to view and download for private research and study only. Not for re-distribution, re-sale or use in derivative works. © Cambridge University Press.

Keywords

non-life insurance, cultural variables, econometric analysis

Share

COinS
 

Date Posted: 25 October 2018

This document has been peer reviewed.