This life insurance is a fundamental tool to focus on the saving and investment capacity of global citizens, its transaction volume exceeded 2,380 million euros in 2018, equivalent to 3.2% of world GDP.
We all know some of the advantages of life insurance: compensation, financial protection, personal protection against the risk of death or disability, greater retirement security… Life insurance in the global economy as a tool to structure and organize processes investment and savings.
As a result, the size of such insurance is estimated to have exceeded €2.38 billion in 2018, or 3.2% of global gross domestic product (GDP). In fact, general economic behavior is closely related to this life insurance scenario. In this way, GDP growth drives life insurance premiums and vice versa: Evolution of GDP of life insurance benefits.
This effect is especially pronounced in life risk, although it also affects life savings and investment. However, the latter are also subject to other restrictions, such as interest rates or the risk spreads of fixed-rate bonds.
Most of the global life insurance billing (more than 93% of the total) is concentrated in three regions: Asia (almost 38%), Western Europe (approximately 33%) and North America (approximately 23%). ). In general terms, developed countries have a broader coverage of these insurances.
Public policy as a savings engine
In the context of the proven importance of public policies to encourage the growth of savings in the economy, life insurance is also viewed as a useful tool for this purpose. In this sense, the different management measures can be divided into three categories.
First of all, we find the regulatory measures. These types of actions can guarantee long-term regulatory stability for insurers, as well as incentives for innovation.
Second , there are government measures that require participation in the pension system. Here we find mandatory occupational pension systems and voluntary pension plans.
Finally, we have tax incentives for savings and investment products, life risk insurance, to prevent the application of indirect taxes from hindering said savings.
