Time gap of the impact of risk insurance, life insurance and reinsurance on social progress: The case of Ukraine
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DOIhttp://dx.doi.org/10.21511/ins.14(1).2023.13
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Article InfoVolume 14 2023, Issue #1, pp. 153-168
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The paper examines, using the example of Ukraine from 2003 to 2020, how and to what extent the development of various segments of the insurance market (risk insurance, life insurance, and reinsurance) influences the overall level of social progress. It also identifies the time gaps through which this influence manifests. The study creates a single measure that looks at various aspects such as social class differences, spending patterns, income changes, and government social spending (their standardized values, weighed by the principal component method, integrated through additive convolution). Using VAR modeling, the impact of the development indicators of different segments of the insurance market (risk insurance, life insurance, and reinsurance) at the current moment and with lags of one, two, and three years is investigated, as well as the level of social progress in Ukraine in previous years. The modeling confirms that social reforms yield significant results for social progress only after three years, similarly to the increase in the number of insurance companies. Given insurers’ assets and payout levels, their growth in life insurance has a faster impact on social progress than in risk, while the opposite is true for premiums. Insurance premiums transferred to Ukrainian reinsurers negatively and slowly (over three years) affect social progress, and to non-resident reinsurers – positively and faster (within a year). Across most indicators, life insurance not only influences Ukraine’s social progress more quickly than others but also provides a more substantial social effect.
- Keywords
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JEL Classification (Paper profile tab)G20, G22
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References59
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Tables2
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Figures7
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- Figure 1. Dynamics of Ukraine’s Social Development Indicators for 2003–2020
- Figure 2. Scree plot of the correlation matrix’s eigenvalues
- Figure 3. Contribution of each social development indicator separately to the integrated indicator
- Figure 4. Procedure for calculating the weighting factors of the Ukrainian social development indicators in the combined indicator
- Figure 5. Ukraine’s 2003–2020 standardized values for social development indicators
- Figure 6. Ukraine’s integral social progress indicator: dynamics from 2003 to 2020
- Figure 7. Ukraine’s non-life, life, and reinsurance indicator dynamics from 2003 to 2020
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- Table 1. Dynamics of the vector autoregression results of the integral indicator of Ukraine’s social progress’s (ISP) dependency on pertinent risk insurance variables in relation to time gaps
- Table 2. Factor characteristics of the variables in assessing the integrated indicator of Ukraine’s social progress
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