European Insurance Market Development under the Economic Welfare: Advanced Econometric Approaches

Abstract

Purpose: The connection between insurance and the degree of economic development of countries has been long studied in the literature, being argued that they are potentiating each other. Against this background, the objective of this chapter is to appraise the way in which the insurance activity, overall, and, distinctively, considering only the life insurance field, is interconnected with the economic development of the European Union (EU) Member States.

Method: In order to assess the insurance development, we considered the insurance density and penetration degree indicators (total and life insurance), and, for the wellbeing dimension, we applied the Human Development Index (HDI), associated with other economic indicators. The research methodology consists of an advanced econometric procedure, namely macroeconometric models – robust regression, for the period 2007–2019.

Findings: The results obtained highlight significant positive associations between insurance development and wellbeing at the level of EU countries.

Originality and Significance of Findings: This research considers an integrative indicator that measures the wellbeing dimension, including the human factor (HDI), in addition to the economic development degree, that has not been addressed so far in the literature, which reveals the originality of this study. Thereby, adjusted policies and strategies developed to sustain the main components of HDI (education, life expectancy and living standards) became paramount keystones in order to promote insurance development.

Citation

Cristea, M., Noja, G.G., Cârstina, S.-V. and Caragiani, E.S. (2022), "European Insurance Market Development under the Economic Welfare: Advanced Econometric Approaches", Grima, S., Özen, E. and Gonzi, R.E.D. (Ed.) Insurance and Risk Management for Disruptions in Social, Economic and Environmental Systems: Decision and Control Allocations within New Domains of Risk (Emerald Studies in Finance, Insurance, and Risk Management), Emerald Publishing Limited, Leeds, pp. 277-289. https://doi.org/10.1108/978-1-80117-139-720211013