Insuring cultures: unveiling diverse paths of national influences on insurance in developed and developing realms

Purpose: Our research aims to delve into the influence of diverse national cultures on the consumption of life insurance across various countries. We will conduct a comprehensive analysis, drawing on Hofstede's cultural dimensions, to understand how national cultural dimensions shape life insurance consumption's landscape in developed and developing nations. Design/methodology/approach: This study utilized data from 57 countries from 1996 to 2020 and employed a comprehensive set of regression models in our analysis, encompassing pooled Generalized Least Squares (GLS), Feasible Generalized Least Squares (FGLS) after accounting for autocorrelation and heteroskedasticity, random GLS with control for country-specific autocorrelation, the Fama-MacBeth model, and cross-sectional analysis employing means of time series. Findings: Uncertainty avoidance, long-term orientation, and indulgence significantly influence life insurance demand. The impact of uncertainty avoidance and indulgence varies between developed and developing countries. Variables such as dependency ratio, the percentage of the Muslim population, tertiary education, and world governance indicators display differing effects in developed and developing nations. Conversely, national income, social security, bank development, stock market development, inflation, individualism, and power distance consistently impact life insurance demand in both contexts. Research limitations/implications: Limitation of this study lies in the utilization of static national cultural dimensions, without considering their gradual fluctuations. Our findings are useful for life insurance managers to formulate product launch plans tailored to countries with distinct cultural characteristics. Our findings remind investors in insurance companies to exercise caution once the insurance company tends to enter into developed countries which score high in IVR or MAS, or developing countries with high PDI or UAI scores. Originality/value: This paper provides a comprehensive empirical analysis of the determinants of life insurance expenditures in developed and developing countries, which fills a gap in the literature and helps scholars, insurance practitioners, and policymakers to understand more comprehensively the insurance needs of people in different cultures.