RISK MANAGEMENT REIMAGINED: EXPLORING THE RATIONAL DIMENSIONS OF LIFE INSURANCE IN UNCERTAIN TIMES

Abstract

Life insurance plays a pivotal role in long-term investments and the sustained growth of economies, complementing personal savings. This financial product supports individuals in critical life events such as marriage, birth, death, casualty, and retirement. In developed countries like Japan, the United Kingdom, and France, life insurance premiums constituted a substantial portion of total insurance premiums in recent years. Economic volatility, crises, and uncertain conditions significantly influence the demand for life insurance. However, the individual responses to these economic uncertainties in the context of life insurance remain a subject of ongoing theoretical and empirical debate.

Understanding and regulating individuals' behavior concerning life insurance, savings, personal investments, and protection are crucial for economic policy, insurance marketing, and potential policyholders. As global aging trends shift public social commitments to personal responsibility, funded insurance plans like pensions, healthcare, and unemployment gain importance.

Remarkably, Russia has shown remarkable growth in its life insurance market, outpacing many developed and developing countries. This growth occurs amid unpredictable economic shocks, including a drop in oil prices, sanctions, and a lack of structural reforms. Despite resurging oil prices, Russia's GDP growth remains modest, and real disposable income has steadily declined, contributing to increased poverty levels.

In this backdrop of economic and social uncertainty, this study explores how individuals in Russia respond to the evolving economic landscape in their life insurance behavior.