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Analysis of Factors Affecting Variable Annuities Consumption in Korea
Journal of Insurance and Finance
2020, 31(3),
pp.103-139
DOI :10.23842/jif.2020.31.3.004
Publisher : Korea Insurance Research Institute
Research Area : Business Management
DOI :10.23842/jif.2020.31.3.004
Publisher : Korea Insurance Research Institute
Research Area : Business Management
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There are few research results dealing with consumption of variable annuities, empirically using micro data. We analyse the characteristics of variable annuity policyholders and the determinant factors that affect consumption of variable annuities, using insurance consumer survey data (2017-2019) of the Korea Insurance Research Institute. The results of this study are as follows. The rate of variable annuity holders was 2.9% in average but it was declining from 2017 to 2019. Regression analysis shows that the propensity for consuming variable annuities is statistically significant in highly educated and high income consumer, which is a consistent result with prior research papers of the United States. Moreover, there is an inverted U-shaped relationship between age and the propensity. Though the propensity is higher for female in average, it is higher for male when income levels are higher. The propensity to hold variable annuities is higher for single females with older ages than younger ones. The results provide useful information for life insurance companies to understand the characteristics of the consumers for variable annuities.
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