Law and the Determinants of Property-Casualty Insurance

The determinants of non-life insurance consumption: A VECM analysis in Central and South-Eastern Europe

“…Four of Hofstede's cultural dimensions are included in the panel regression analysis in addition to GNP, socio-political stability, and economic freedom. Esho et al (2004) expand the work of Browne et al (2000) by using a larger set of countries and by introducing the origin of the legal system and a measure of property rights in their model. Dummy variables, characterising the English, French, German, and Scandinavian legal system origin, are found to have an insignificant effect.…”

The Determinants of Non-life Insurance Penetration in Selected Countries from South Eastern Europe

“…Per capita income has a much greater impact on motor insurance than on general liability. Esho, Kirievsky, and Zurbruegg [2004] expand the work of Browne, Chung, and Frees [2000] by using a larger set of countries and by introducing the origin of the legal system and a measure of property rights in their model. Dummy variables, characterizing the English, French, German, and Scandinavian legal systems' origins, are found to have an insignificant effect.…”

“…Browne, Chung, and Frees [2000], analyzed general liability and motor vehicle insurance in OECD countries and found a significantly positive relationship between premium density and GNP per capita. Additionally [Esho, Kirievsky, and Zurbruegg 2004] examined developed and developing countries between 1984 and 1998 and found a strong positive relationship between national income and the nonlife insurance premium. Outreville [1990] and Ward and Zurbruegg [2000] strongly emphasized that the insurance industry, through risk transfer, financial intermediation and employment can generate externalities and economic growth.…”

“…It was deemed that higher education leads to lower risk aversion, and that, in turn, leads to more risk-taking by skilled and well-educated people. When [Browne, Chung, and Frees 2000;Esho, Kirievsky, and Zurbruegg 2004] were discussing non-life insurance; they also took the level of education as a proxy for risk aversion.…”

“…Browne, Chung, and Frees [2000] find the legal system to be a significant factor in the development of non-life insurance. Esho, Kirievsky, and Zurbruegg [2004] also investigate the impact of the legal system but find it insignificant after checking income and property rights. Recently Park, Lemaire, and Chua [2010] showed that the use of a Common Law legal system is the most important determinant of toughness of bonus-malus systems in automobile insurance.…”