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 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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