Title: Impact of national culture on insurers' risk-taking: evidence from selected CEE countries

Authors: Tomislava Pavić Kramarić; Maja Pervan

Addresses: University Department of Forensic Sciences, University of Split, Ruđera Boškovića 33, 21 000 Split, Croatia ' Faculty of Economics, Business and Tourism, University of Split, Cvite Fiskovića 5, 21 000 Split, Croatia

Abstract: In conducting their activities, insurers are exposed to various risks. Since insurance firms play a significant role in supporting the economy, the analysis of factors influencing risk-taking is gaining importance, and national culture plays a significant role in this. Specifically, three national culture dimensions, including individualism, uncertainty avoidance and power distance, with a set of firm-, industry- and cross-country-oriented variables, are employed to see their potential influence on risk-taking, which is presented with a Z-score. Applying regression analysis on two sub-samples comprising of life and non-life insurance companies from selected Central and Eastern European countries (CEE) that operated in 2019, the authors find negative influence of uncertainty avoidance and power distance on risk-taking in both non-life and life insurance segments. Furthermore, GDP per capita growth also has negative influence on a Z-score whereas share of premium in GDP positively affects risk-taking. These findings relate to both insurance segments while the positive influence of concentration is found in the non-life segment only.

Keywords: national culture dimensions; individualism; power distance; uncertainty avoidance; insurance firms; risk-taking; CEE countries.

DOI: 10.1504/IJSE.2024.139505

International Journal of Sustainable Economy, 2024 Vol.16 No.3, pp.287 - 303

Received: 01 Sep 2022
Accepted: 16 Nov 2022
Published online: 03 Jul 2024 *

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