SOCIO-ECONOMIC DRIVERS OF SUSTAINABLE INSURANCE IN THE EUROPEAN UNION: EVIDENCE FROM ADVANCED ECONOMETRIC MODEL

Observing the European landscape where disparities between European Union Member States are present in terms of economic development and, in particular, the insurance sector, this research aims to analyze the impact of key socio-economic indicators on the degree of insurance penetration for the period 2007-2023. The research methodology consists of two sets of econometric models, namely, panel data analysis based on multifactorial regression models (Robust Regression, Cross-sectional time-series with Feasible Generalized Least Squares, Generalized Method of Moments with Arellano–Bond dynamic panel-data estimation, Between Regression (regression on group means), Random-effects with the Maximum Likelihood estimation, and Instrumental variables on two stage least squares), and Bayesian Network Analysis. The analysis shows a diverse relationship, suggesting that Member States with developed economies have a more advanced insurance sector. Moreover, it shows a complex relationship, both positive and negative, depending on the model analyzed. The results of the models applied in the article show various influences of human development, poverty, employment rate and inflation on insurance penetration. This article provides a comprehensive approach and understanding of how economic and social factors influence the insurance sector in the European Union and provides essential information to support the future development of the insurance sector.