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LIFE INSURANCE DEMAND IN BOSNIA AND HERZEGOVINA: STATISTICAL ANALYSIS

Year 2019, Volume: 2 Issue: 2, 141 - 165, 20.03.2019

Abstract

The focus of this research is to examine the impact of socio-demographic determinants and income on demand for life insurance in Bosnia and Herzegovina (B&H). Proxy variable of life insurance demand is the annual life insurance premium per capita in B&H. Socio-demographic determinants that are analyzed are: gender, marital status, educational level, age, employment status and number of family members. Questionnaire consists of 13 questions. Number of respondents after eliminating missing data is 120. Since the distribution of dependent variable deviates from normal, non-parametric tests are considered appropriate. Seven hypotheses are tested. Results indicate that annual life insurance premium per capita in B&H does not depend on gender and there are significant differences between married and single respondents in life insurance premium that they pay on annual basis. Results also show that the increase in
income increases the life insurance demand and the significant impact of educational level. As a concluding remark actuaries and life insurance companies should pay much attention to: marital status, educational level and income while creating life insurance policies. Hence, this research can serve as a useful insight for actuaries to easily charge life insurance products and to support life insurance development strategy in B&H.

References

  • 1- Andelinovic, M., Misevid, P. and Pavkovic, A. (2016). Determinants of Life Insurance Demand in New EU Member States: Panel Data Analysis. Notitia, Vol. 2 (2), pp. 1-12.
  • 2- Beck, T.and Webb, I. (2002). Economic, Demographic, and Institutional Determinants of Life Insurance Consumption across Countries. The World Bank Economic Review, Vol. 17(1), pp. 51-87.
  • 3- Berekson, L.L. (1972). Birth Order, Anxiety, Affiliation and the Purchase of Life Insurance. The Journal of Risk and Insurance, Vol. 39, pp. 93-108.
  • 4- Çelik, S. and Kayali, M. (2009). Determinants of Demand for Life Insurance in European Countries. Problems and Perspectives in Management, Vol. 7(3), pp. 32-37.
  • 5- Chun, C., Chuo, L., Mei, T. i Teng, W. (2013). Determinant of Life Insurance Consumption among University Tunku Abdul Rahman Staffs in Perak Campus. Universiti Tunku Abdul Rahman.
  • 6- Ćurak, M., Džaja, I. and Pepur, S. (2013). The Effect of Social and Demographic Factors on Life Insurance Demand in Croatia. International Journal of Business and Social Science, Vol. 4(9), pp. 65-72.
  • 7- Dash, G. and Sood, T. (2013). Why Should One Invest in a Life Insurance Product? An Empirical Study. International Journal of Arts, Science & Commerce, Vol. 4(1), pp. 36-45.
  • 8- Haiss, P. and Sumegi, K. (2006). The Relationship of Insurance and Economic Growth - A Theoretical and Empirical Analysis. Empirica, Journal of Applied Economics and Economic Policy, Vol. 35(4), pp. 405-431.
  • 9- Jain, D. and Talach, K. (2012). A Study of Factors Influencing Consumer Choice of Life Insurance Products. International Journals of Multidiciplinary Research Studies, Vol. 1(2), pp. 11-21.
  • 10- Liebenberg, A., Carson, M. and Dumm, R. (2010). A Dynamic Analysis of the Demand for Life Insurance. American Risk and Insurance Association, Vol. 79(3), pp. 619-644.
  • 11- Mahdzan, N.S. and Victorian, S.M. (2013). The Determinants of Life Insurance Demand: A Focus on Saving Motives and Financial Literacy. Canadian Center of Science and Education, Vol. 9(5), pp. 274-284.
  • 12- Munir, S., Khan, A. and Jamal, A. (2012). Impacts of Macroeconomic & Demographic Variables on the Demand of Life Insurance: A case study of State Life Insurance Corporation of Pakistan (1973-2010). University of Management and Technology, Lahore, Pakistan.
  • 13- Negi, D. and Singh, P. (2012). Demographic Analysis of Factors Influencing Purchase of Life Insurance Products in India. European Journal of Business and Management, Vol. 4(7), pp. 169-180.
  • 14- Nesterova, D. (2008). Determinants of the Demand for Life Insurance: Evidence from Selected CIS and CEE Countries. National University “Kyiv-Mohyla Academy”.
  • 15- Neumann, S. (1969). Inflation and Saving through Life Insurance. The Journal of Risk and Insurance, Vol. 36, pp. 567-582.
  • 16- Outreville, J. F. (1996). Life Insurance Markets in Developing Countries. Journal of Risk and Insurance, Vol. 63(2), pp. 263-278.
  • 17- Satrovic, E. (2018). Merits of Life Insurance, Munich: GRIN Verlag.
  • 18- Satrovic, E. (2017). Financial Development and Human Capital in Turkey: ARDL Approach, Cappadocia Academic Review, Vol. 1(2), pp. 1-15.
  • 19- Satrovic, E. and Muslija, A. (2018). Economic and Demographic Determinants of the Demand for Life Insurance: Multivariate Analysis, Journal of Management and Economics Research, Vol. 16, pp. 102-115.
  • 20- Sarkodiem E.E. and Yusif, H.M. (2015). Determinants of Life Insurance Demand, Consumer Perspective - A Case Study of Ayeduase-Kumasi Community, Ghana. Business and Economics Journal, Vol. 6(3).
  • 21- Sen, S. (2008). Insurance in India: Determinants of Growth and the Case of Climate Change. TERI University.
  • 22- Ward, D., Zurbruegg, R. (2000). Does Insurance Promote Economic Growth? Evidence from OECD Countries. Journal of Risk and Insurance, 67 (4), pp. 489-506.
  • 23- Zerriaa, M. and Noubbigh, H. (2016.) Determinants of Life Insurance Demand in the MENA Region. The Geneva Papers on Risk and Insurance - Issues and Practice, Vol. 41(3), pp. 491-511.
  • 24- Zerriaa, M., Amiri, M. M., Noubbigh, H., and Naoui, K. (2017). Determinants of Life Insurance Demand in Tunisia. African Development Review, Vol. 29(1), pp. 69-80.

Life Insurance Demand in Bosnia and Herzegovina: Statistical Analysis

Year 2019, Volume: 2 Issue: 2, 141 - 165, 20.03.2019

Abstract

The focus of this
research is to examine the impact of socio-demographic determinants and income
on demand for life insurance in Bosnia and Herzegovina (B&H). Proxy
variable of life insurance demand is the annual life insurance premium per
capita in B&H. Socio-demographic determinants that are analyzed are:
gender, marital status, educational level, age, employment status and
number of family
members. Questionnaire consists of 13 questions. Number of respondents after
eliminating missing data is 120. Since the
distribution of dependent variable deviates
from normal, non-parametric tests are considered appropriate. Seven hypotheses
are tested.
Results indicate that annual life insurance premium
per capita in B&H does not depend on gender and there are significant
differences between married and single respondents in life insurance premium
that they pay on annual basis. Results also show that the increase in income
increases the life insurance demand. Furthermore, results show there is a
significant relationship between respondent’s attitudes towards life insurance
development and educational level. As a concluding remark actuaries and life
insurance companies should pay much attention to: marital status, educational
level and income while creating life insurance policies. Hence, this research
can serve as a useful insight for actuaries to easily charge life insurance
products and to support life insurance development strategy in B&H.

References

  • 1- Andelinovic, M., Misevid, P. and Pavkovic, A. (2016). Determinants of Life Insurance Demand in New EU Member States: Panel Data Analysis. Notitia, Vol. 2 (2), pp. 1-12.
  • 2- Beck, T.and Webb, I. (2002). Economic, Demographic, and Institutional Determinants of Life Insurance Consumption across Countries. The World Bank Economic Review, Vol. 17(1), pp. 51-87.
  • 3- Berekson, L.L. (1972). Birth Order, Anxiety, Affiliation and the Purchase of Life Insurance. The Journal of Risk and Insurance, Vol. 39, pp. 93-108.
  • 4- Çelik, S. and Kayali, M. (2009). Determinants of Demand for Life Insurance in European Countries. Problems and Perspectives in Management, Vol. 7(3), pp. 32-37.
  • 5- Chun, C., Chuo, L., Mei, T. i Teng, W. (2013). Determinant of Life Insurance Consumption among University Tunku Abdul Rahman Staffs in Perak Campus. Universiti Tunku Abdul Rahman.
  • 6- Ćurak, M., Džaja, I. and Pepur, S. (2013). The Effect of Social and Demographic Factors on Life Insurance Demand in Croatia. International Journal of Business and Social Science, Vol. 4(9), pp. 65-72.
  • 7- Dash, G. and Sood, T. (2013). Why Should One Invest in a Life Insurance Product? An Empirical Study. International Journal of Arts, Science & Commerce, Vol. 4(1), pp. 36-45.
  • 8- Haiss, P. and Sumegi, K. (2006). The Relationship of Insurance and Economic Growth - A Theoretical and Empirical Analysis. Empirica, Journal of Applied Economics and Economic Policy, Vol. 35(4), pp. 405-431.
  • 9- Jain, D. and Talach, K. (2012). A Study of Factors Influencing Consumer Choice of Life Insurance Products. International Journals of Multidiciplinary Research Studies, Vol. 1(2), pp. 11-21.
  • 10- Liebenberg, A., Carson, M. and Dumm, R. (2010). A Dynamic Analysis of the Demand for Life Insurance. American Risk and Insurance Association, Vol. 79(3), pp. 619-644.
  • 11- Mahdzan, N.S. and Victorian, S.M. (2013). The Determinants of Life Insurance Demand: A Focus on Saving Motives and Financial Literacy. Canadian Center of Science and Education, Vol. 9(5), pp. 274-284.
  • 12- Munir, S., Khan, A. and Jamal, A. (2012). Impacts of Macroeconomic & Demographic Variables on the Demand of Life Insurance: A case study of State Life Insurance Corporation of Pakistan (1973-2010). University of Management and Technology, Lahore, Pakistan.
  • 13- Negi, D. and Singh, P. (2012). Demographic Analysis of Factors Influencing Purchase of Life Insurance Products in India. European Journal of Business and Management, Vol. 4(7), pp. 169-180.
  • 14- Nesterova, D. (2008). Determinants of the Demand for Life Insurance: Evidence from Selected CIS and CEE Countries. National University “Kyiv-Mohyla Academy”.
  • 15- Neumann, S. (1969). Inflation and Saving through Life Insurance. The Journal of Risk and Insurance, Vol. 36, pp. 567-582.
  • 16- Outreville, J. F. (1996). Life Insurance Markets in Developing Countries. Journal of Risk and Insurance, Vol. 63(2), pp. 263-278.
  • 17- Satrovic, E. (2018). Merits of Life Insurance, Munich: GRIN Verlag.
  • 18- Satrovic, E. (2017). Financial Development and Human Capital in Turkey: ARDL Approach, Cappadocia Academic Review, Vol. 1(2), pp. 1-15.
  • 19- Satrovic, E. and Muslija, A. (2018). Economic and Demographic Determinants of the Demand for Life Insurance: Multivariate Analysis, Journal of Management and Economics Research, Vol. 16, pp. 102-115.
  • 20- Sarkodiem E.E. and Yusif, H.M. (2015). Determinants of Life Insurance Demand, Consumer Perspective - A Case Study of Ayeduase-Kumasi Community, Ghana. Business and Economics Journal, Vol. 6(3).
  • 21- Sen, S. (2008). Insurance in India: Determinants of Growth and the Case of Climate Change. TERI University.
  • 22- Ward, D., Zurbruegg, R. (2000). Does Insurance Promote Economic Growth? Evidence from OECD Countries. Journal of Risk and Insurance, 67 (4), pp. 489-506.
  • 23- Zerriaa, M. and Noubbigh, H. (2016.) Determinants of Life Insurance Demand in the MENA Region. The Geneva Papers on Risk and Insurance - Issues and Practice, Vol. 41(3), pp. 491-511.
  • 24- Zerriaa, M., Amiri, M. M., Noubbigh, H., and Naoui, K. (2017). Determinants of Life Insurance Demand in Tunisia. African Development Review, Vol. 29(1), pp. 69-80.
There are 24 citations in total.

Details

Primary Language English
Journal Section research article
Authors

Elma Satrovic 0000-0002-8000-5543

Publication Date March 20, 2019
Submission Date August 30, 2018
Acceptance Date January 15, 2019
Published in Issue Year 2019 Volume: 2 Issue: 2

Cite

APA Satrovic, E. (2019). LIFE INSURANCE DEMAND IN BOSNIA AND HERZEGOVINA: STATISTICAL ANALYSIS. Kapadokya Akademik Bakış, 2(2), 141-165.