Culture and the demand for non‐life insurance: Empirical evidences from middle‐income and high‐income economies

This paper investigates the impact of culture on non‐life insurance expenditure using a panel dataset covering 27 middle‐income countries and 40 high‐income countries in the period 1980–2014. Based on the two‐step system GMM estimator, it is found that several cultural dimensions such as masculinity, uncertainty avoidance and power distance significantly explain the spending on non‐life insurance in middle‐income countries, while masculinity is the only cultural factor that significantly explains spending on non‐life insurance in high‐income countries. Traditional drivers of the demand for non‐life insurance, such as per capita income, economic freedom and urbanization, also behave differently comparing between the two income‐based groups of countries. These findings provide useful recommendations for business firms and policymakers around the world, especially transitional economies, to promote and sustain the development of the non‐life insurance sector, which is an important engine for growth and prosperity.