Culture, financial crisis and the demand for property, accident and health insurance in the OECD countries

• Published in: Economic modelling Vol. 93; pp. 480 - 498
• Main Authors: Trinh, Cong Tam, Nguyen, Xuan, Sgro, Pasquale, Pham, Cong S.
• Format: Journal Article
• Language: English
• Published: Elsevier B.V 01.12.2020
• Subjects: Accident and health insurance; Culture; Global financial crisis; OECD countries; Property insurance; Accident and health insurance; Property insurance; OECD countries; Global financial crisis; Culture
• ISSN: 0264-9993; 1873-6122
• DOI: 10.1016/j.econmod.2020.09.002

Culture has been known to play an important role in explaining differences in consumption behaviour across countries. Yet, we know very little how it affects spending on non-life insurance products. This paper attempts to shed some light on how cultural characteristics impact the demand for property, accident and health insurance, focusing on the OECD countries in the period 2000–2017. We find, via the system generalized method of moment estimations, that cultural characteristics such as individualism, long-term orientation, masculinity and uncertainty avoidance were the drivers of the expenditure on property insurance, whereas long-term orientation, uncertainty avoidance and hypometropia explained accident and health insurance spending across the OECD countries. In the presence of the global financial crisis, cultural effects on property insurance spending turned out to be relatively minor, with the exception of individualism. These findings provide valuable information for non-life insurance companies, consumers and policy makers in the OECD countries. •We study how culture impacts non-life insurance demand at the product level.•We focus on property, accident and health insurance in the OECD countries.•We identify the key cultural characteristics that confirm the causal relationship.•The roles of the global financial crisis (GFC) are also investigated.•Findings are useful for insurance companies, consumers and government policies.