Economic and demographic determinants of premium reserve in Western Balkan countries during and after the crisis

This article aims at investigating the impact of economic and demographic factors on premium reserve and thus the possibility for life insurers to invest in the financial market of Western Balkan countries. Using the data panel including economic and demographic trends in the countries of this region in the period from year 2006 to 2016, it is determined that price stability and higher deposit rates may cause faster development of insurance market. Contrary to previous findings, which indicate wages and population ageing as key driving factors in developed countries, in this region these are the youth dependency and care for their schooling. This indicates that a higher significance is given to the component of insurance of death risk than the savings one. However, during crisis period, more than post‐crisis period, higher demand for this type of savings was determined due to the decline in confidence in banking sector.