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Globalisation and Convergence of International Life Insurance Markets

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  • Chien-Chiang Lee

    (Department of Finance, National Sun Yat-Sen University, Kaohsiung 804, Taiwan. t1212516@ms37.hinet.net)

  • Chi-Hung Chang

    (Department of Finance, National Sun Yat-Sen University, Kaohsiung 804, Taiwan. t1212516@ms37.hinet.net)

Abstract

Using panel data of 39 countries over the period 1979–2007, this paper is the first to empirically examine the influence of the KOF index of globalisation (overall and its three main sub-indices) on the development and convergence of international life insurance markets by a panel cointegration technique. We find that globalisation has a significant impact on the development of international life insurance markets and on reducing the deviation between individual countries’ life insurance penetration and the world average. Economic and social dimensions exert a similar effect as well, and the effect of economic globalisation is higher, while the effect of political dimension is not significant. In addition, social globalisation plays a dominant role on the interactive influence of different dimensions of globalisation, implying that socio-cultural factors are a latent factor behind economic or political influence. Finally, most countries’ structural breaks coincide with the fast growth wave of international life insurance markets.

Suggested Citation

  • Chien-Chiang Lee & Chi-Hung Chang, 2012. "Globalisation and Convergence of International Life Insurance Markets," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 37(1), pages 125-154, January.
    • Handle: RePEc:pal:gpprii:v:37:y:2012:i:1:p:125-154
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    Citations

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    Cited by:

    1. Ma Jiyue & Huang Fei & Bruhn Aaron, 2021. "Estimating China’s Future Life Insurance Market," Asia-Pacific Journal of Risk and Insurance, De Gruyter, vol. 15(1), pages 1-16, January.
    2. 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.
    3. 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.
    4. 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.
    5. Chang, Chun-Ping & Berdiev, Aziz N. & Lee, Chien-Chiang, 2013. "Energy exports, globalization and economic growth: The case of South Caucasus," Economic Modelling, Elsevier, vol. 33(C), pages 333-346.
    6. Chang, Tsangyao & Cheng, Shu-Ching & Pan, Guochen & Wu, Tsung-pao, 2013. "Does globalization affect the insurance markets? Bootstrap panel Granger causality test," Economic Modelling, Elsevier, vol. 33(C), pages 254-260.
    7. Elena Nebolsina, 2020. "The Impact of Demographic Burden on Insurance Density," SAGE Open, , vol. 10(4), pages 21582440209, December.
    8. 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).
    9. Chen, Sen-Sung & Cheng, Shu-Ching & Pan, Guochen & Wu, Tsung-Pao, 2013. "The relationship between globalization and insurance activities: A panel data analysis," Japan and the World Economy, Elsevier, vol. 28(C), pages 151-157.

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