LIFE INSURANCE DEMAND IN BOSNIA AND HERZEGOVINA: STATISTICAL ANALYSIS

Year 2019, Volume: 2 Issue: 2, 141 - 165, 20.03.2019

Elma Satrovic

Abstract

The focus of this research is to examine the impact of socio-demographic determinants and income on demand for life insurance in Bosnia and Herzegovina (B&H). Proxy variable of life insurance demand is the annual life insurance premium per capita in B&H. Socio-demographic determinants that are analyzed are: gender, marital status, educational level, age, employment status and number of family members. Questionnaire consists of 13 questions. Number of respondents after eliminating missing data is 120. Since the distribution of dependent variable deviates from normal, non-parametric tests are considered appropriate. Seven hypotheses are tested. Results indicate that annual life insurance premium per capita in B&H does not depend on gender and there are significant differences between married and single respondents in life insurance premium that they pay on annual basis. Results also show that the increase in
income increases the life insurance demand and the significant impact of educational level. As a concluding remark actuaries and life insurance companies should pay much attention to: marital status, educational level and income while creating life insurance policies. Hence, this research can serve as a useful insight for actuaries to easily charge life insurance products and to support life insurance development strategy in B&H.

Keywords

actuaries, life insurance demand, non-parametric tests, socio-demographic determinants

Life Insurance Demand in Bosnia and Herzegovina: Statistical Analysis

Abstract

The focus of this
research is to examine the impact of socio-demographic determinants and income
on demand for life insurance in Bosnia and Herzegovina (B&H). Proxy
variable of life insurance demand is the annual life insurance premium per
capita in B&H. Socio-demographic determinants that are analyzed are:
gender, marital status, educational level, age, employment status and number of family
members. Questionnaire consists of 13 questions. Number of respondents after
eliminating missing data is 120. Since the
distribution of dependent variable deviates
from normal, non-parametric tests are considered appropriate. Seven hypotheses
are tested. Results indicate that annual life insurance premium
per capita in B&H does not depend on gender and there are significant
differences between married and single respondents in life insurance premium
that they pay on annual basis. Results also show that the increase in income
increases the life insurance demand. Furthermore, results show there is a
significant relationship between respondent’s attitudes towards life insurance
development and educational level. As a concluding remark actuaries and life
insurance companies should pay much attention to: marital status, educational
level and income while creating life insurance policies. Hence, this research
can serve as a useful insight for actuaries to easily charge life insurance
products and to support life insurance development strategy in B&H.

Keywords

actuaries, life insurance demand, non-parametric tests, socio-demographic determinants

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