The influence of perceived economic context upon life insurance demand

Abstract

Life insurance is the French’s preferred financial service in terms of outstanding, despite volatile annual contributions. Bancassurance professionals discuss the reasons behind the contracts’ subscription and buyback, often referring to the role of the perceived economic context. On the theoretical side, the literature attempts to explain life insurance demand mainly mobilizing socio-demographic variables without questioning the potential role of the consumer confidence towards the economic situation. We then fill this gap by leading a longitudinal study crossing an insurance leader’s database with the INSEE household confidence index. Our results show significant links between perceived economic context and life insurance demand. By integrating a new explanatory variable of the phenomenon, we propose to fill the theoretical gap and help professionals to better sell and limit the buyback of life insurance policies.