Differentiation factors of levels of regional insurance market development in Russian conditions

Abstract

Subject. The article investigates causes of interregional disproportions in the level of insurance market development in modern Russian conditions. Objectives. The aim is to review the effect of economic, social, demographic, and geographical factors on the development of insurance in current realities. Methods. The study employs the regression analysis of panel data to estimate the effect of factors determining the differentiation of the levels of regional insurance markets development. Insurance premiums per capita and the ratio of insurance premiums to gross regional product in the context of various types of insurance serve as explained variables. Results. The most favorable conditions for insurance development are formed in the largest urban agglomerations with high population density, primarily, Moscow and St. Petersburg. The main driver for regional insurance markets development in Russia is the development of the banking system, which stimulates demand for insurance services from borrowers and expands channels for the sale of other insurance products. An increase in the level of education of the population is accompanied by higher risk appetite, and does not lead to increased demand for insurance services. Stable relationship between crime rate and the level of insurance market development is not revealed, which is consistent with results obtained for Eastern Europe. Conclusions. Increasing the role of insurance in the system of economic growth factors requires implementation of measures to improve the financial and insurance literacy of Russian citizens, and additional tax incentives for policyholders' expenses for insurance protection of life and property.