The growth of the services sector in the Asian economies led to substantial changes in the financial sector. The Asian Financial Crisis, affecting the ASEAN economies in particular resorted to more regulatory measures to enhance delivery of products with minimal risks and failures.
The countries surrounding the ASEAN economies also went through a phase of economic-restructuring, the most notable event being the impact of China’s accession to WTO. The insurance industry in most of the Asian economies were publicly owned and operated. Government monopoly kept this segment of the financial market isolated from domestic private or foreign participation.
Barring few exceptions, the insurance market on an average remained underdeveloped in terms of insurance density and penetration. Regulatory changes since mid eighties and opening of these markets to private and foreign entry have been luring global heavyweight insurers to enter these economies. As more suppliers enter these markets, the issue is to re-examine the factors that can probably elevate demand for insurance products.
This study on 4 SAARC countries, 2 countries from Greater China Region and 6 ASEAN countries, deals with this particular issue. After reviewing existing theoretical as well as empirical literature, we identify variables determining demand and categorize them as economic, demographic, legal and socio-political variables. Using a time series framework we then take into account a single economy, India, and reassess the issues and hypothesis dealt in the panel analysis.
The paper is organized as follows. The paper begins with the theoretical as well as empirical review of literature. Based on the theoretical review as well as the results obtained from earlier research studies, we frame our set of researchable questions and issues. We present our identified preferred set of determinants and a priori expected relationship with the demand proxy.
The methodology portion is divided into explaining briefly the 12 selected Asian economies and India followed by data sources. Next, we specify the two separate models to be estimated via use of two different econometric techniques viz. panel data analysis and time series analysis. Proceeding to the results and interpretation, we present the estimation results relating to the panel and the time series data. Lastly, we summarise the findings and draw conclusions.
The countries surrounding the ASEAN economies also went through a phase of economic-restructuring, the most notable event being the impact of China’s accession to WTO. The insurance industry in most of the Asian economies were publicly owned and operated. Government monopoly kept this segment of the financial market isolated from domestic private or foreign participation.
Barring few exceptions, the insurance market on an average remained underdeveloped in terms of insurance density and penetration. Regulatory changes since mid eighties and opening of these markets to private and foreign entry have been luring global heavyweight insurers to enter these economies. As more suppliers enter these markets, the issue is to re-examine the factors that can probably elevate demand for insurance products.
This study on 4 SAARC countries, 2 countries from Greater China Region and 6 ASEAN countries, deals with this particular issue. After reviewing existing theoretical as well as empirical literature, we identify variables determining demand and categorize them as economic, demographic, legal and socio-political variables. Using a time series framework we then take into account a single economy, India, and reassess the issues and hypothesis dealt in the panel analysis.
The paper is organized as follows. The paper begins with the theoretical as well as empirical review of literature. Based on the theoretical review as well as the results obtained from earlier research studies, we frame our set of researchable questions and issues. We present our identified preferred set of determinants and a priori expected relationship with the demand proxy.
The methodology portion is divided into explaining briefly the 12 selected Asian economies and India followed by data sources. Next, we specify the two separate models to be estimated via use of two different econometric techniques viz. panel data analysis and time series analysis. Proceeding to the results and interpretation, we present the estimation results relating to the panel and the time series data. Lastly, we summarise the findings and draw conclusions.