Determinants Analysis Of The Life Insurance Demand

After the World War II, all countries of the world came into the period of relative stability and peaceful development. Especially between the 50s and 70s, the world insurance industry got high-speed development, along with the world economy soon resuming and high increasing. Main world countries' total premiums increased from 21 billion dollar of 1950 to 630.5 billion dollar of 1980, which increased by 30 times in 34 years, far higher than the economic growth rate of the corresponding period. After the 80s of the last century, as a result of the world political turbulence and the economy instability, especially influenced by the economy shrinking and standing stagnation of the developed countries, Occident's insurance industries, as the main body of the world insurance industry was increasing slowly. So the world insurance industry's speed was slow, just higher than the economic growth rate. Otherwise in the large insurance countries, the insurance industry had reached considerable insurance penetration and insurance density, and lots of products had be close to saturation, so it is hard to develop quickly. But some potential insurance markets, including East Asia, South East Asia, East Europe, Latin America, and so on, gradually became the new bright spots of the world insurance industry.Several century before the World War II, the life insurance industry's development was slow, a little proportion of the total insurance industry. But after 50s of the last century, it gets quickly development, reaching the 40.3% of the total premium in 1970. After going through a slow development, the life insurance industry gets high development again after 80s, and replaces the hundreds years domination position of non-life insurance. The life insurance high development makes lots of scholars to research the theory of life insurance demand.The demand of life insurance theory studies the relationship between life insurance purchasing and macroeconomics determinants, which is an analysis from macro angle of view. The theory seeks to alleviate or eliminate the uncertainty of future earnings flow by purchasing life insurance and annuities and finally realize maximum of the lifetime consumption utility. And the elements influencing the demand of life insurance are analyzed in this process. On the base of Lewis model, this paper analysis three kinds of determinants of life insurance, such as demographic determinants, social determinants, economic determinants.In the empirical research, this paper use panel data model to analyze the 48 counties data from 1992 to 2004, and then study the how the determinants, including per capita income, dependency ratio, life expectancy, inflation, banking sector development, urbanization level, education, savings, unemployment rate and real interest rate, to influence the demand of life insurance. After regress to 48 countries data, this paper class four groups according the per capita income. We find the demand of life insurance has different determinants in the different per capita income group, even has different influence degree to the same determinants.There are three innovations in this paper. First, this paper uses 11 determinants data of 48 countries, not just considering the data of China. Second, this paper uses panel data model to research the theory, not simple multiple linear regression model like most other literatures. Third, this paper classes 48 countries to four groups according per capita income to study the different influence of determinants in different economic development countries.From the empirical research, we can realize that the demand of life insurance has different determinants in different level of economic development, which will benefit the development of Chinese life insurance. Otherwise the personnel and supervisors can realize the difference between Chinese and the world life insurance industry, definitude the long development goal of Chinese future life insurance industry.