SIMULATION OF THE DYNAMICS OF INSURANCE MARKET DEVELOPMENT IN OECD COUNTRIES
DOI:
https://doi.org/10.31891/mdes/2022-6-19Keywords:
insurance market, OECD, factor analysis, cluster analysisAbstract
The topicality of the topic is determined by the rapid globalization processes taking place in the financial sector in general and the insurance sector in particular. During the formation of the map of measures for the construction of the national insurance policy, it is necessary to consider the socio-economic level of the country's development and the influence of external factors. This work aims to develop a methodology for modeling the dynamics of the insurance market development in OECD countries. The object of the study is the process of modeling the growth of the insurance market of countries based on crucial insurance indicators. The research subject is mathematical methods and models for assessing the dynamics of developing the insurance market in OECD countries. Research methods. To study the tasks, general scientific and specific research methods were used: induction and deduction, analysis and synthesis, comparison and logical generalization, tabular and graphical method, factor analysis, cluster analysis (hierarchical clustering method (Word method), and k- average. The work analyzed the essence of the processes of transformation of the insurance market of OECD countries under the influence of socio-economic and geopolitical factors; systematized existing approaches to modeling the dynamics of the development of the insurance market of OECD countries; formulated the tasks of modeling the dynamics of the growth of the insurance market in OECD countries; selected input data for the construction of the mathematical model for assessing the dynamics of the insurance market in OECD countries; the requirements for the model for determining the integral indicator of the development of the insurance market in the OECD countries and their clustering are described; the obtained results are analyzed, and the adequacy of the constructed mathematical model is checked; recommendations are developed based on the results of the calculations.
References
Akhter, W., Khan, S.U. Determinants of Takāful and conventional insurance demand: A regional analysis. Cogent Economics and Finance. 2017. 5 (1), art. no. 1291150. doi: 10.1080/23322039.2017.1291150.
Aleksandrov, V., Rubanov, P., & Eisa, M. M. Problems of implementation of compulsory health insurance in Ukraine. Health Economics and Management Review. 2021. 2(1), 76-88. https://doi.org/10.21272/hem.2021.1-08.
Alhassan, A.L., Biekpe, N. Determinants of life insurance consumption in Africa. Research in International Business and Finance. 2016. 37, pp. 17-27. doi: 10.1016/j.ribaf.2015.10.016.
Armstrong, J., Paolucci, F., McLeod, H., & van de Ven, W. P. M. M. Risk equalisation in voluntary health insurance markets: A three country comparison. Health Policy. 2010. 98(1), 39-49. https://doi.org/10.1016/j.healthpol.2010.06.009.
Asimit, V., Boonen, T.J.Insurance with multiple insurers: A game-theoretic approach. European Journal of Operational Research. 2018. 267 (2), pp. 778-790. doi: 10.1016/j.ejor.2017.12.026.
Bayraktar, E., Young, V.R.Hedging life insurance with pure endowments. Insurance: Mathematics and Economics. 2007. 40 (3), pp. 435-444. doi: 10.1016/j.insmatheco.2006.07.002.
Beenstock, M., G. Dickinson, and S. Khajuria. The determination of life premiums: An international cross-section analysis 1970–1981. Insurance Mathematics and Economics. 2016. 5: 261–270. https://doi.org/10.1016/0167-6687(86)90020-X.
Benlagha, N., & Hemrit, W. Internet use and insurance growth: Evidence from a panel of OECD countries. Technology in Society. 2020. 62 doi:10.1016/j.techsoc.2020.101289.
Canh, N. P., Wongchoti, U., & Thanh, S. D. Does economic policy uncertainty matter for insurance development? evidence from 16 OECD countries. Geneva Papers on Risk and Insurance: Issues and Practice. 2021. 46(4), 614-648. doi:10.1057/s41288-020-00192-5
Dash, S., Pradhan, R.P., Maradana, R.P., Gaurav, K., Zaki, D.B., Jayakumar, K. Insurance market penetration and economic growth in Eurozone countries: time series evidence on causality. Future Business Journal. 2018. 4 (1), pp. 50-67.
de Boer, P.S., van Deursen, A.J.A.M., van Rompay, T.J.L. Accepting the Internet-of-Things in our homes: The role of user skills. Telematics and Informatics. 2019. 36, pp. 147-156. doi: 10.1016/j.tele.2018.12.004.
Dragotă, I.-М., Cepoi, C. O., & Ştefan, L. Threshold effect for the life insurance industry: Evidence from OECD countries. Geneva Papers on Risk and Insurance: Issues and Practice. 2022. doi:10.1057/s41288-022-00272-8.
Dror, D. M., Shahed Hossain, S. A., Majumdar, A., Koehlmoos, T. L. P., John, D., & Panda, P. K. What factors affect voluntary uptake of community-based health insurance schemes in low- and middle-income countries? A systematic review and meta-analysis. PLoS ONE. 2016. 11(8), 1-31. https://doi.org/10.1371/journal.pone.0160479.
Emms, P. Pricing general insurance in a reactive and competitive market. Journal of Computational and Applied Mathematics. 2011. 236 (6), pp. 1314-1332. doi: 10.1016/j.cam.2011.08.014.
Gründl, H., Schmeiser, H. Capital allocation for insurance companies - What good iS iT. Journal of Risk and Insurance. 2007. 74 (2), pp. 301-317. doi: 10.1111/j.1539-6975.2007.00214.x.
Haiss, P., Sümegi, K. The relationship between insurance and economic growth in Europe: A theoretical and empirical analysis. Empirica. 2008. 35 (4), pp. 405-431. doi: 10.1007/s10663-008-9075-2.
Han, L., Li, D., Moshirian, F., Tian, Y. Insurance development and economic growth. Geneva Papers on Risk and Insurance: Issues and Practice. 2010. 35 (2), pp. 183-199. doi: 10.1057/gpp.2010.4.
Hanbali, H. Pricing insurance policies with offsetting relationship. Annals of Actuarial Science. 2022. 16(2), 261-287. doi:10.1017/S1748499521000208.
Kuznyetsova, A., Sydorchenko, T., Zadvorna, O., Nikonenko, U., & Khalina, O. Assessment of aspects of the COVID-19 crisis in the context of ensuring economic security. International Journal of Safety and Security Engineering. 2021. 11(6), 615-622. https://doi.org/10.18280/ijsse.110601.
Lee, C.-C., Chang, C.-H., Arouri, M., Lee, C.-C. Economic growth and insurance development: The role of institutional environments. Economic Modelling. 2016. 59, pp. 361-369. doi: 10.1016/j.econmod.2016.08.010.
Li, D., and F. Moshirian. International investment in insurance services in the US. Journal of Multinational Financial Management. 2004. 14 (3): 249–260. https://doi.org/10.1016/j.mulfin.2003.04.001.
Li, D., F. Moshirian, P. Nguyen, and T. Wee. The demand for life insurance in OECD countries. Journal of Risk and Insurance. 2007. 74 (3): 637–652.
Lin, C., Hsiao, Y.-J., Yeh, C.-Y. Financial literacy, financial advisors, and information sources on demand for life insurance. Pacific Basin Finance Journal. 2017. 43, pp. 218-237. doi: 10.1016/j.pacfin.2017.04.002.
Liu, H.-H., Chang, A., Shiu, Y.-M. Interest rate derivatives and risk exposure: Evidence from the life insurance industry. North American Journal of Economics and Finance. 2020. 51, art. no. 100978. doi: 10.1016/j.najef.2019.04.021.
Ma, Y.-L., Pope, N., Yeung, R. Foreign participation and its relationship with non-life insurer performance in the northeast Asian markets. Geneva Papers on Risk and Insurance: Issues and Practice. 2013. 38 (1), pp. 43-61. doi: 10.1057/gpp.2012.20.
OECD: Insurance Statistics. URL: https://stats.oecd.org/
Panda, P., Chakraborty, A., & Dror, D. M. Building awareness to health insurance among the target population of community-based health insurance schemes in rural India. Tropical Medicine and International Health. 2015. 20(8), 1093-1107. https://doi.org/10.1111/tmi.12524.
Sudtasan, T., Mitomo, H. The Internet of Things as an accelerator of advancement of broadband networks: A case of Thailand. Telecommunications Policy. 2018. 42 (4), pp. 293-303. doi: 10.1016/j.telpol.2017.08.008.
Tsymbaliuk, I., Pavlikha, N., Zelinska, O., Ventsuryk, A., & Radko, A. Assessing the level of competitiveness of the insurance sector during economic crises: The example of Ukraine. Insurance Markets and Companies. 2021. 12(1), 72-82. http://dx.doi.org/10.21511/ins.12(1).2021.07.
Vermesan, O., Friess, P., Guillemin, P., Sundmaeker, H., Eisenhauer, M., Moessner, K., Arndt, M., Baldini, G. Internet of Things strategic research and innovation Agenda. Internet of Things Applications: From Research and Innovation to Market Deployment. 2014. pp. 7-142. ISBN: 978-879310295-8; 978-879310294-1.
Vieriezubova, T., & Levchenko, V. Openness of the insurance market for foreign entities: methodology and experience of Ukraine. Financial Markets, Institutions and Risks. 2017. 1(2), 87-95. http://doi.org/10.21272/fmir.1(2).87-95.2017.
Yuan, C., Jiang, Y. Factors affecting the demand for insurance in China. Applied Economics. 2015. 47 (45), pp. 4855-4867. doi: 10.1080/00036846.2015.1037437.
Zhuravka, O., Daher, K., & Bosak, I. Development of the voluntary health insurance market in Ukraine. Health Economics and Management Review. 2021. 2(2), 83-91. https://doi.org/10.21272/hem.2021.2-08.
