Title: Insurance
Author: Aadishree Milind Wankhede
Literature Review
1. Trade Credit Insurance and Financial Risk Management in Supply Chains
Who is the Best Insurance Buyer? Financing the Capital-Constrained Manufacturer with Trade Credit Insurance” by Nina Yan, Hechen Zhong, and Tingting Tong explains how manufacturers who do not have enough capital manage financial risk using trade credit insurance. In supply chains, manufacturers often depend on financing methods like reverse factoring. To reduce the risk of unpaid debts, trade credit insurance is added. The study compares two situations: when the manufacturer buys the insurance and when the financial institution (factor) buys it. The research shows that when the manufacturer is highly short of capital, insurance increases profits for all members of the supply chain. The best choice of insurance depends on factors like production cost and the level of capital shortage. Overall, insurance helps reduce risk and improve financial performance in supply chain management.
2. Impact of Insurance Pricing on Consumer Purchase Behaviour
“How Insurance Prices Affect Consumers’ Purchase Decisions: Insurance Price as a Risk Signal” by Jochen Reiner, Julia Wamsler, Torsten Bornemann, and Martin Natter studies how insurance pricing affects consumer buying decisions. It explains that when companies charge a very high price for optional insurance, customers may think the product itself is risky. In other words, customers see insurance price as a signal of product risk. If insurance is expensive, people may avoid buying the main product. The study also finds that giving clear and proper product information can reduce this negative effect. This article highlights the importance of smart pricing strategies in marketing.
3. Role of Insurance Literacy in Shaping Adolescents’ Purchase Intention in India
“Does Insurance Literacy Shape Adolescents’ Purchase Intention? Quasi-Experimental Evidence from India” by Gopi Anil Reddy, Shreyansh Nema, and Jyothi Polepeddi focuses on insurance literacy among adolescents in Telangana, India. The study examines whether teaching insurance knowledge increases teenagers’ intention to purchase insurance. The results show that after attending an insurance literacy program, purchase intention increased by 23.4%. This improvement was seen across different genders, income groups, castes, and both rural and urban areas. The study concludes that insurance education plays a very important role in increasing insurance adoption in developing countries like India.
4. Influence of Strong and Weak Social Relations on Commercial Insurance Participation
“Effects of Social Relations on Family’s Participation in Commercial Insurance—Based on the Perspective of Strong and Weak Relations” by Xiaoquan Wang, Dandan Huang, Xiqian Feng, and Yu Yan discusses how social relationships influence families’ decisions to buy commercial insurance. The study divides social relations into strong relations, such as close family and friends, and weak relations, such as colleagues and acquaintances. It finds that strong relations reduce the need for commercial insurance because families depend on each other for financial help during difficult times. On the other hand, weak relations increase insurance participation because they provide information and social influence. This shows that both culture and social networks affect insurance demand.
5. Corporate Diversification Strategy and Performance in the Insurance Industry
“Performance and Corporate Diversification: Evidence from the Insurance Industry” by Maria Sonia Chopo-Murillo, María Rubio-Misas, and Vicente Salas-Fumás studies diversification in the insurance industry, particularly in Spain. It examines whether insurance companies diversify into different types of insurance products because of poor performance. The results suggest that companies with lower efficiency tend to diversify more in order to improve profitability and reduce risk. Diversification helps companies use internal resources better and overcome growth barriers. The study concludes that diversification is a strategic decision taken to improve long-term performance.
6. Machine Learning Techniques for Fraud Detection and Risk Classification in Insurance
Balanced Underbagged Ensemble Approach for Classifying Highly Imbalanced Datasets in the Insurance and Financial Sectors” by Alberto Gutierrez-Gallego, Oscar Garnica, Daniel Parra, J. Manuel Velasco, and J. Ignacio Hidalgo explain how machine learning models face problems when data is highly imbalanced, especially in insurance and finance sectors like fraud detection and credit risk analysis. In many real-life datasets, fraud cases are very few compared to normal cases, which creates bias and reduces prediction accuracy. The authors propose a new method called the Balanced Underbagged Ensemble approach, which improves the accuracy of detecting minority cases such as fraud claims while maintaining overall performance. The method was tested on real-world datasets related to auto insurance claims and credit card fraud. The results show that this approach performs better than many traditional oversampling and under sampling techniques. Overall, the study highlights how advanced data techniques can improve risk prediction and decision-making in the insurance and financial sectors.
7. Application of Business Intelligence and Open Data in Insurance Market Analysis
“Business Intelligence Model for Multidimensional Analysis of the Insurance Market Based on Open Data” by Ana Šego, Maja Gakić, and Davor Škobić discusses how open data and business intelligence tools can help analyze the insurance market more effectively. The study focuses on Bosnia and Herzegovina and uses vehicle registration data to study market share and performance of insurance companies across different regions and time periods. The developed system helps companies understand important indicators like number of policies issued, market trends, and geographic distribution. It presents information through simple visual reports so that even users without technical knowledge can understand it. The authors also suggest adding artificial intelligence features in the future for predictive analysis and customer segmentation. The study shows how open data and BI systems can support better strategic decision-making and promote data-driven practices in the insurance industry.
8. Climate Change, Disaster Risk, and Resilience Strategies in the Insurance Sector
“Climate Change and Insurance: Embracing Resilience for Private Market Survival” by John A. Roper, David G. Casagrande, and Paolo Bocchini explains how climate change is increasing natural disasters and creating serious challenges for the private insurance market, especially in the United States. As disasters become more frequent and severe, traditional methods of risk management such as premium pricing and catastrophe bonds are becoming less effective. The authors argue that insurance companies must focus on building resilience by investing in disaster prevention and infrastructure improvements. They also suggest public-private partnerships and tools like resilience bonds to share risks and reduce financial losses. The study highlights that improving resilience can help insurance companies remain financially stable while also protecting businesses and homeowners from future risks.
9. Impact of Family Structure on Private Insurance Adoption among Older Parents
“Children as Insurance Revisited: Impact of Children on Private Insurance Adoption among Older Parents” by Zhaoxue Ci examines whether having more children reduces or increases the need for private insurance among older parents in China. Traditionally, children were considered a form of financial security for old age. However, the study finds that parents with more children are actually more likely to buy private insurance. This effect is stronger among older individuals who are less dependent on their children and have access to other financial resources. The research suggests that changes in social systems and economic development have reduced dependence on children for financial support. The study concludes that private insurance is becoming an important tool for managing old-age risks in modern society.
10. Effect of Government Guarantees on Market Discipline in the Insurance Industry
“Market Discipline and Government Guarantees: Evidence from the Insurance Industry” by Yiling Deng, J. Tyler Leverty, Kenny Wunder, and George Zanjani studies how government guarantees affect risk-taking behaviour in insurance companies in the United States. In some states, government-backed guarantee funds protect policyholders if an insurance company fails. The study examines whether these guarantees reduce market discipline, meaning whether companies take more risks because they feel protected. The findings show that government guarantees have limited overall impact on insurer risk behaviour, except in certain situations related to credit rating downgrades. The research concludes that while guarantees provide security, they do not completely remove market discipline. This study helps in understanding how government support influences financial stability in the insurance industry.
Conclusion
Overall, these ten studies collectively highlight the multidimensional role of insurance in modern economies. They show that insurance is not only a financial risk management tool but also influenced by capital constraints, pricing strategies, literacy levels, social relationships, technological advancements, climate change, demographic shifts, diversification strategies, and government policies. The research emphasizes that informed decision-making, data-driven systems, financial education, resilience planning, and strategic diversification are essential for strengthening the insurance sector. Together, these studies provide a comprehensive understanding of how insurance markets function at individual, organizational, and policy levels, and how they adapt to economic, social, and environmental challenges.
Reference:
1. Ci, Z. (2025). Children as insurance revisited: Impact of children on private insurance adoption among older parents. Journal of Risk & Insurance, 92(1), 116–138. https://doi.org/10.1111/jori.12492
2. Chopo-Murillo, M. S., Rubio-Misas, M., & Salas-Fumás, V. (2025). Performance and corporate diversification: Evidence from the insurance industry. Business Research Quarterly, 28(4), 805–824. https://doi.org/10.1177/23409444251351328
3. Deng, Y., Leverty, J. T., Wunder, K., & Zanjani, G. (2025). Market discipline and government guarantees: Evidence from the insurance industry. Journal of Risk & Insurance, 92(1), 76–115. https://doi.org/10.1111/jori.12493
4. Gutierrez-Gallego, A., Garnica, O., Parra, D., Velasco, J. M., & Hidalgo, J. I. (2025). Balanced underbagged ensemble approach for classifying highly imbalanced datasets in the insurance and financial sectors. Intelligent Systems in Accounting, Finance & Management, 32(4), 1–17. https://doi.org/10.1002/isaf.70018
5. Reiner, J., Wamsler, J., Bornemann, T., & Natter, M. (2025). How insurance prices affect consumers’ purchase decisions: Insurance price as a risk signal. Journal of Marketing Research, 62(1), 154–169. https://doi.org/10.1177/00222437241270217
6. Reddy, G. A., Nema, S., & Polepeddi, J. (2025). Does insurance literacy shape adolescents’ purchase intention? Quasi-experimental evidence from India. Applied Economics. https://doi.org/10.1080/00036846.2025.2558236
7. Roper, J. A., Casagrande, D. G., & Bocchini, P. (2025). Climate change and insurance: Embracing resilience for private market survival. Sustainable Development, 33(6), 8499–8510. https://doi.org/10.1002/sd.70106
8. Šego, A., Gakić, M., & Škobić, D. (2025). Business intelligence model for multidimensional analysis of the insurance market based on open data. Economy & Market Communication Review, 15(2), 535–546. https://doi.org/10.7251/EMC2502535S
9. Wang, X., Huang, D., Feng, X., & Yan, Y. (2024). Effects of social relations on family’s participation in commercial insurance—Based on the perspective of strong and weak relations. Applied Economics, 56(50), 6055–6069. https://doi.org/10.1080/00036846.2024.2342070
10. Yan, N., Zhong, H., & Tong, T. (2025). Who is the best insurance buyer? Financing the capital-constrained manufacturer with trade credit insurance. International Journal of Production Research, 63(15), 5475–5492. https://doi.org/10.1080/00207543.2025.2453830