Macroeconomic Challenges for Life Insurance Market in the Baltic States

The development of life insurance sector in the Baltic States is influenced by various opportunities and threats from the macroeconomic environment. In this context, the aim of this paper is to identify some macroeconomic factors that influence various indicators describing the life insurance market in Latvia, Estonia and Lithuania in the period 1993-2020 (direct premiums written, life insurance density, and life insurance penetration). The panel data approach suggests that economic growth, expenditure on tertiary education and income supports the development of the life insurance sector in these countries, while higher unemployment negatively affects the insurance market. These results have implications for the life insurance market forecasting in the new international context dominated by the Covid-19 pandemic.