On the macrofinancial determinants of life and non-life insurance premiums

Martin Hodula, Jan Janků (), Martin Casta and Adam Kučera
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Jan Janků: Czech National Bank

The Geneva Papers on Risk and Insurance - Issues and Practice, 2023, vol. 48, issue 4, No 2, 760-798

Abstract: Abstract This paper tests potential determinants of the development of the insurance sector. Using a rich dataset for 24 European countries spanning two decades, we identify a set of macrofinancial factors that are the most robust predictors of growth of gross premiums in the life and non-life insurance sectors. We show that both life and non-life premiums co-move with the business cycle and are positively related to higher savings and a more developed financial system. In addition, we provide new evidence on the role of market concentration and price effects. We find that market concentration matters only for life insurance, whereas the price channel is significant only for non-life insurance. From a policy perspective, our empirical estimates can be used to refine the existing macroprudential stress tests of the insurance sector.

Keywords: Business cycle; Insurance; Life insurance; Macrofinancial determinants; Non-life insurance (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1057/s41288-021-00249-z

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