
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
Recommended Citation
Park, S., & Lemaire, J. (2012). The Impact of Culture on the Demand for Non-Life Insurance. ASTIN Bulletin: The Journal of the IAA, 42 (2), 501-527. Retrieved from https://repository.upenn.edu/statistics_papers/612
Included in
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Date Posted: 25 October 2018
This document has been peer reviewed.