Determinants of the Insurance Consumption: Theoretical Approach

Paper examines the way how various personal, demographic and economic factors determine the consumption of the insurance policy. Insurance is complex and abstract service that has become an increasingly important part of the future planning and protection of individuals by providing a wide range of policies for consumers. The predominance of the supply-side in the insurance market points out on the necessity of the knowledge of the factors affecting the insurance consumption. What are the key determinants associated with the life and non-life insurance consumption? Paper summarizes most robust predictors of the life and non-life insurance consumption that could be used in predictions of consumer's demand. These results can help insurers to better understand their potential consumers and to improve their acquisition and segmentation techniques. In addition, as insurance is an important tool in individuals and household's future security schemes and risk management. The understanding of consumers who buy and do not buy private insurance is crucial also for policymakers that could easier target state programs and other forms of social security schemes.