Impact of economic factors on life insurance development in Western Balkan Countries

Life insurance market in Western Balkan countries is underdeveloped compared to other European countries, but in the recent decade it has been developing moderately under the influence of various factors, primarily economic, but also demographic, political and other. The aim of this manuscript is to analyze and indicate the most significant economic factors that have important influence on life insurance products purchase. In order to prove the hypothesis established in the manuscript, panel data analysis is used to examine the impact of GDP, unemployment rate, wages and interest rate on total life premium in Western Balkans in the period 2005 to 2015. The results of the analysis showed that the above-mentioned economic factors mainly affect total life premium in countries of the Western Balkans. GDP and wages have a significant and positive impact on demand for life insurance, while the impact of unemployment rate and interest rate is negative.