Impact of foreign capital on the insurance market development in the Visegrad Group countries
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Published:
Jan 19, 2020
Keywords:
international finance, insurance market, insurance companies, foreign capital, countries of the Visegrad Group
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Abstract
Insurance markets are developing under the influence of various factors, which are divided into economic, demographic, social and cultural. The share of foreign insurance companies is treated as one of the structural factors. Research on this subject does not confirm unambiguously the influence of foreign capital on the development of insurance markets. Analysis of dependencies between foreign capital and the development of the insurance market in the Visegrad Group countries are the prime objectives of the research presented in this paper. The following research hypothesis has been advanced: the share of foreign capital is a determinant of the development of insurance markets as measured by the growth in the written premium and measured by the growth in the insurance penetration rate. In search of an answer to the query and in order to verify the research hypothesis, a critical review of the literature is undertaken, contents of factors which influence the development of insurance markets are analysed, and econometric methods are applied. A panel model is constructed and results of the model estimation are analysed to verify the hypothesis. The study has corroborated the research hypothesis. 'Ihis study has covered insurers active in the Visegrad Group insurance markets in 1999-2016 using annual figures. Data of these insurance markets are derived from the OECD.
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Bukowski, S. I. ., & Lament, M. . (2020). Impact of foreign capital on the insurance market development in the Visegrad Group countries. Journal of Management and Financial Sciences, (38), 33–45. https://doi.org/10.33119/JMFS.2019.38.3
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References
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37. Ward, D., Zurbruegg, R. (2002). Law, politics and life insurance consumption in Asia. Geneva Papers on Risk and Insurance, No. 27(3), pp. 395-412.
38. Zhang, C., Zhu, N. (2005). Determinants of the development of insurance in China under the globalization, Working Paper Centre D'Etudes et de Recherches sur le Developpement International. Retrieved from: https://pdfs.semanticscholar.org/5b03/2f2e73daba35 84185301f73be197250e7fe9.pdf [accessed: 10.12.2018].
39. Zheng, W., Liu, Y., Deng, Y. (2009). A comparative study of international insurance sector. The Geneva Papers on Risk and Insurance - Issues and Practice, No. 34(1), pp. 85-99.
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2. Beck, T., Webb, I. (2003). Economic, demographic and institutional determinants of life insurance consumption. The World Bank Economic Review, Vol. 17, No.1, pp. 51-88.
3. Bednarczyk, T. (2012). Wpływ działalności sektora ubezpieczeniowego na wzrost gospodarczy. Lublin: Wydawnictwo Uniwersytetu Marii Curie-Skłodowskiej.
4. Brokesova, Z., Vachalkova, I. (2016). Macroeconomic environment and insurance industry development: The case of Visegrad group countries. Central European Review of Economic Issues. Economicka Revue, Vol. 19, pp. 63-72.
5. Browne, M.J., Chung, J., Frees, E.W. (2000). International property - liability insurance con- sumption. The Journal of Risk and Insurance, No. 67 (1).
6. Browne, M.J., Kim, K. (1993). An international analysis of life insurance demand. The Journal of Risk and Insurance, No. 60(4), pp. 616-634.
7. Bukowski, S. (2009). Rozwój rynków finansowych a wzrost gospodarczy, przypadek Polski. [In:] Globalne rynki finansowe w dobie kryzysu. J. Bednarczyk, S. Bukowski, J. Misala (Eds.). Warszawa: CeDeWu.
8. Bukowski, S. (2010). Związek między rozwojem rynków finansowych a wzrostem gospodar-czym. Analiza porównawcza przypadków Polski, Grecji, Irlandii i Włoch. [In:] Wzrost gospo-darczy I polityka ekonomiczna, W. Kwiatkowska, E. Kwiatkowski (Eds.). Łódź: Wydawnictwo Uniwersytetu Łódzkiego.
9. Burić, M.N., Smolović, J.C., Bozović, M.L., Filipović, A.L. (2017). Impact of economic factors on life insurance development in Western Balkan Countries. Zbornik radova Ekonomskog fakulteta u Rijeci: ćasopis za ekonomsku teoriju i praksu, Vol. 35 No. 2.
10. Chui, A.C., Kwok, C.C. (2008). National culture and life insurance consumption. Journal of International Business Studies, No. 39(1), pp. 88-101.
11. Cristian, B.C. (2010). Current coordinates of the Romanian insurance sector. Annals of Faculty of Economics, No. 1(2), pp. 504-508.
12. Hwang, T., Greenford, B. (2005). A cross-section analysis of the determinants of life insurance consumption in Mainland China, Hong Kong, and Taiwan. Risk Management and Insurance Review, Vol. 8, No. 1, pp. 103-125.
13. Duchackova, E., Dańhel, J. (2006). Postavem zem^ V4 na pojistnem trhu Evropske unie. [In:] Competitivness in the EU - Challenge for the V4 countries. Nitra: SPU.
14. Duchackova, E., Dańhel, J. (2010). Teorie pojistnych. trhu. Praha: Professional Publishing.
15. Enz, R. (2000) The S-curve relation between per-capita income and insurance penetration. The Geneva Papers and Insurance, No. 25(3), pp. 396-406.
16. Kurylo, V., Kurylo, L., Zhovnirchyk, Y., Kartashov, Y., Sokol, S. (2017). The development of the insurance market of Ukraine amid the global trends in insurance. Investment Management and Financial Innovations, Vol. 14, Iss. 1.
17. Levine, R. (2004). Finance and growth: theory and evidence. NBER Working Papers No. 10766. Cambridge National Bureau of Economic Research.
18. Levine, R. (1997). Financial development and economic growth: views and agenda. Journal of Economic Literature, No. 35(2), pp. 688-726.
19. Li, D., Moshirian, F., Nguyen, P., Wee, T. (2007). The demand for life insurance in OECD countries. The Journal of Risk and Insurance, No. 74(3), pp. 637-652.
20. Medved’, D., Kavcic, S. (2012). An empirical study of efficiency in Croatia and Slovenia insur- ance markets. Ekonomska istrazivanja, No. 25(1), pp. 105-120.
21. OECD (2008). Insurance Statistics Yearbook 1997-2006.
22. OECD (2011). Insurance Statistics Yearbook 2003-2010.
23. OECD (2015). Insurance Statistics Yearbook 2007-2014.
24. OECD (2016). OECD Business and Finance Outlook 2015.
25. OECD (2017). OECD Business and Finance Outlook 2016.
26. Outreville, F.J. (1996). Life insurance markets in developing countries. The Journal of Risk and Insurance, No. 63 (2).
27. Outreville, F.J. (1990). The economic significance of insurance markets in developing countries. The Journal of Risk and Insurance, No. 57 (3).
28. Owsiak, S. (2002). Metodologiczne aspekty badań nad sektorem finansowym. [In:] Sektor finansowy w Polsce, S. Owsiak (Ed.). Warszawa: PWE.
29. Pelegrin, F., Schich, S., de Serres, A. (2002). Increases in business investment rates in OECD countries in the 1990 s: How much can be explained by Fundamentals? OECD Economic Department Working Papers, No. 327.
30. Przybytniowski, J.W. (2009). Rozwój ubezpieczeń gospodarczych w procesie integracji europej¬skiej. Kielce: Uniwersytet Humanistyczno-Przyrodniczy Jana Kochanowskiego.
31. Pye, R. (2005) The evolution of financial services in transition economies: An overview of the insurance sector. Post-communist Economies, No. 17(2), pp. 205-223.
32. Sankaramuthukumar, S., Alamelu, K. (2012). A SWOT analysis of Sri Lankan insurance sector. The Journal of Risk and Insurance, No. 9(1), pp. 27-47.
33. Sen, S. (2007). Are life insurance demand determinants valid for selected Asian economies and India? Institute for Social and Economic Change. Paper for Presentation at Annual Meeting of APRIA, pp. 1-27. Retrieved from: https://www.scribd.com/ document/230968492/13507Paper-APRIA-Subir-Draft [accessed: 11.12.2018].
34. Sen, S., Madheswaran, S. (2013). Regional determinants of life insurance consumption: evidence from selected Asian economies. Asian-Pacific Economic Literaturę, Vol. 27, No. 2, pp. 86-103.
35. Słownik języka polskiego (1993). Warszawa: PWN.
36. Wieczorek-Kosmala, M. (2016). Non-life insurance markets in CEE countries - part I: prod- ucts' structure. Journal of Economics and Management, Vol. 25(3), pp. 109-125.
37. Ward, D., Zurbruegg, R. (2002). Law, politics and life insurance consumption in Asia. Geneva Papers on Risk and Insurance, No. 27(3), pp. 395-412.
38. Zhang, C., Zhu, N. (2005). Determinants of the development of insurance in China under the globalization, Working Paper Centre D'Etudes et de Recherches sur le Developpement International. Retrieved from: https://pdfs.semanticscholar.org/5b03/2f2e73daba35 84185301f73be197250e7fe9.pdf [accessed: 10.12.2018].
39. Zheng, W., Liu, Y., Deng, Y. (2009). A comparative study of international insurance sector. The Geneva Papers on Risk and Insurance - Issues and Practice, No. 34(1), pp. 85-99.
40. Zietz, E.N. (2003). An examination of the demand for life insurance. Risk Management and Insurance Review, Vol. 6, No. 2, pp. 159-191.