Globalisation and Convergence of International Life Insurance Markets

Chien-Chiang Lee () and Chi-Hung Chang
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Chi-Hung Chang: Department of Finance, National Sun Yat-Sen University, Kaohsiung 804, Taiwan. t1212516@ms37.hinet.net

The Geneva Papers on Risk and Insurance - Issues and Practice, 2012, vol. 37, issue 1, 125-154

Abstract: Using panel data of 39 countries over the period 1979–2007, this paper is the first to empirically examine the influence of the KOF index of globalisation (overall and its three main sub-indices) on the development and convergence of international life insurance markets by a panel cointegration technique. We find that globalisation has a significant impact on the development of international life insurance markets and on reducing the deviation between individual countries’ life insurance penetration and the world average. Economic and social dimensions exert a similar effect as well, and the effect of economic globalisation is higher, while the effect of political dimension is not significant. In addition, social globalisation plays a dominant role on the interactive influence of different dimensions of globalisation, implying that socio-cultural factors are a latent factor behind economic or political influence. Finally, most countries’ structural breaks coincide with the fast growth wave of international life insurance markets.

Date: 2012
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