Determinants of life insurance demand in new EU member states: panel data analysis

Sa？etak The paper analyzes determinants of demand for life insurance products in thirteen countries of the European Union. The expected demand determinants cover sixteen factors divided into macroeconomic, demographic, social and institutional variables. The main aim of the paper is to identify the variables that best explain variations in demand for life insurance and to draw a conclusion as to whether policy makers can contribute to the development of the life insurance market. For this purpose, an unbalanced panel model with a fixed effect for the period from 1995 to 2014 was estimated. The most important variables were macroeconomic ones, especially gross domestic product per capita. Insurance companies need to take into account demographic trends and existing economic situations in the respective economies when developing their products, and as analysis indicates, they have to make efforts in educating the population concerning the benefits of life insurance and the need for long-term savings