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Impact of national culture on insurers' risk-taking: evidence from selected CEE countries

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  • Tomislava Pavić Kramarić
  • Maja Pervan

Abstract

In conducting their activities, insurers are exposed to various risks. Since insurance firms play a significant role in supporting the economy, the analysis of factors influencing risk-taking is gaining importance, and national culture plays a significant role in this. Specifically, three national culture dimensions, including individualism, uncertainty avoidance and power distance, with a set of firm-, industry- and cross-country-oriented variables, are employed to see their potential influence on risk-taking, which is presented with a Z-score. Applying regression analysis on two sub-samples comprising of life and non-life insurance companies from selected Central and Eastern European countries (CEE) that operated in 2019, the authors find negative influence of uncertainty avoidance and power distance on risk-taking in both non-life and life insurance segments. Furthermore, GDP per capita growth also has negative influence on a Z-score whereas share of premium in GDP positively affects risk-taking. These findings relate to both insurance segments while the positive influence of concentration is found in the non-life segment only.

Suggested Citation

  • Tomislava Pavić Kramarić & Maja Pervan, 2024. "Impact of national culture on insurers' risk-taking: evidence from selected CEE countries," International Journal of Sustainable Economy, Inderscience Enterprises Ltd, vol. 16(3), pages 287-303.
    • Handle: RePEc:ids:ijsuse:v:16:y:2024:i:3:p:287-303
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