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Insurance Market Dynamics: Between Global Developments and Local Contingencies

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  • J. David Cummins
  • Bertrand Venard

Abstract

Insurance markets have changed radically and deeply in the past twenty years. Deregulation, globalization of insurance institutions, intensified competition, electronic commerce, bancassurance, and the emergence of new risks are among the challenges faced by insurance markets. Although important global trends are reshaping insurance markets, the emphasis on globalization overlooks the local diversity of insurance markets worldwide. This article reviews the global developments and local factors affecting insurance markets and evaluates the advantages and disadvantages of globalization. Among the important global trends are the increasing sophistication of insurance products, the globalization of risk diversification through reinsurance, the emergence of mega‐financial intermediaries, and the growing importance of supranational agencies such as the World Bank and the World Trade Organization. On the other hand, there remains significant heterogeneity among countries and regions that has a profound impact on insurance markets. Among the important local differences are political, legal, and cultural components as well as differences in financial markets, taxation, regulatory systems, insurer investment strategies, and insurance distribution systems.

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  • J. David Cummins & Bertrand Venard, 2008. "Insurance Market Dynamics: Between Global Developments and Local Contingencies," Risk Management and Insurance Review, American Risk and Insurance Association, vol. 11(2), pages 295-326, September.
    • Handle: RePEc:bla:rmgtin:v:11:y:2008:i:2:p:295-326
    DOI: j.1540-6296.2008.00142.x
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    Cited by:

    1. Lee, Chien-Chiang & Chiu, Yi-Bin, 2016. "Globalization and insurance activity: Evidence on the industrial and emerging countries," The North American Journal of Economics and Finance, Elsevier, vol. 36(C), pages 328-349.
    2. Lee, Chien-Chiang & Lin, Chun-Wei, 2016. "Globalization, political institutions, financial liberalization, and performance of the insurance industry," The North American Journal of Economics and Finance, Elsevier, vol. 36(C), pages 244-266.
    3. Hui Shan Lee & Shyue Chuan Chong & Shen Yap & Bik Kai Sia & Ying Xi Chen, 2021. "Does Economic Freedom in Host Countries Lead to Increased Non-Life Insurance Development?," SAGE Open, , vol. 11(4), pages 21582440211, October.
    4. David Cummins, J. & Rubio-Misas, María, 2021. "Country factor behavior for integration improvement of European life insurance markets," Economic Analysis and Policy, Elsevier, vol. 72(C), pages 186-202.
    5. Godwin Olasehinde-Williams & Mehmet Balcilar, 2018. "Examining the Causal Relationship between Globalization and Insurance Activities in Large Emerging Market (LEM) Economies: Evidence from Bootstrap Panel Granger Causality," Working Papers 15-40, Eastern Mediterranean University, Department of Economics.
    6. Maria Alexandrova & Nadine Gatzert, 2019. "What Do We Know About Annuitization Decisions?," Risk Management and Insurance Review, American Risk and Insurance Association, vol. 22(1), pages 57-100, March.
    7. Nicola Ranger & Swenja Surminski, 2011. "A preliminary assessment of the impact of climate change on non-life insurance demand in the BRICS economies," GRI Working Papers 63, Grantham Research Institute on Climate Change and the Environment.
    8. L. Shirinyan & A. Shirinyan, 2018. "Penetration of insurers with foreign capital in the insurance market of Ukraine," Economy and Forecasting, Valeriy Heyets, issue 2, pages 76-90.
    9. Oswaldo Lorenzo & Paul Esqueda & Janelle Larson, 2010. "Safety and Ethics in the Global Workplace: Asymmetries in Culture and Infrastructure," Journal of Business Ethics, Springer, vol. 92(1), pages 87-106, March.
    10. Chen, Pei-Fen & Lin, Chun-Wei & Lee, Chien-Chiang, 2019. "Financial crises, globalization, and insurer performance: Some international evidence," The North American Journal of Economics and Finance, Elsevier, vol. 48(C), pages 835-856.
    11. Olasehinde-Williams, Godwin & Balcilar, Mehmet, 2020. "Examining the Effect of Globalization on Insurance Activities in Large Emerging Market Economies," Research in International Business and Finance, Elsevier, vol. 53(C).
    12. Lee, Chien-Chiang & Chang, Chi-Hung, 2015. "Financial policy and insurance development: Do financial reforms matter and how?," International Review of Economics & Finance, Elsevier, vol. 38(C), pages 258-278.

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