What Drives Property Insurance Demand in Croatia?

Krišto Jakša (), Kedžo Margareta Gardijan and Tihana Škrinjarić
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Krišto Jakša: University of Zagreb, Faculty of Economics and Business, Zagreb, Croatia.
Kedžo Margareta Gardijan: University of Zagreb, Faculty of Economics and Business, Zagreb, Croatia.

Zagreb International Review of Economics and Business, 2024, vol. 27, issue 1, 155-176

Abstract: Property insurance is an important part of risk management, insurance coverage and vehicle of catastrophic losses financing. In developed countries, property insurance plays an important role in the structure of non-life premium, while in developing markets, such as Croatian, property insurance penetration is rather low. Unfortunately, the recent earthquakes in Zagreb (Croatia) and the surrounding area in 2020 have once again highlighted a large protection gap, resulting in a dominant role of government in financing catastrophic losses. The aim of this paper is to discuss and investigate the factors that determinate property insurance demand in Croatia. Using the VAR (Vector AutoRegression) methodology extended via spillover index approach, we analyse a comprehensive data set ranging from the economic, financial, social to insurance indicators. The conclusions of this research point that some of the expected drivers of insurance demand such as mortgage loans, consumer confidence and loss experience, are not important in Croatia, and that property insurance is dominantly driven by economic development.

Keywords: property insurance demand; Croatian insurance market; VAR model; spillover effect (search for similar items in EconPapers)
JEL-codes: C32 G52 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:vrs:zirebs:v:27:y:2024:i:1:p:155-176:n:1008

DOI: 10.2478/zireb-2024-0008

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