Understanding Life Insurance Demand In European Union: A Multidimensional Perspective

HRMARS - This paper investigates the role of cultural values in shaping life insurance demand across European Union countries. Using an unbalanced panel of 27 economies over the period 2017-2023, we estimate fixed-effects panel regressions to assess the impact of Hofstede’s cultural dimensions alongside key economic, socio-demographic, and institutional controls. Life insurance demand is proxied by the logarithm of insurance density, while income, inflation, income inequality, and political stability are included to ensure model robustness. The results confirm that economic factors remain fundamental drivers of life insurance demand: GDP per capita exerts a strong positive effect, whereas inflation significantly discourages long-term insurance uptake. Income inequality and political stability further support demand by enhancing purchasing capacity and institutional trust. Beyond these traditional determinants, cultural values play a substantial and persistent role. Individualism, indulgence, masculinity, uncertainty avoidance, and long-term orientation all exhibit positive and statistically significant effects in the fully specified model, while power distance remains insignificant. Notably, some cultural effects diverge from earlier findings for advanced economies, suggesting that cultural influences may operate differently within mature European insurance markets. Overall, the study highlights the importance of integrating cultural factors into life insurance demand analyses and provides relevant information for policymakers and insurers aiming to promote sustainable market development, especially in times of global uncertainty.