Nonlinear Relationship between Per Capita Income and Insurance Penetration

In this paper, nonlinear relationship between insurance penetration and per-capita income will be studied. For this purpose, the researchers specified S-shaped Curve as two-factor logistic growth functions and estimated its parameters by MLE method using panel data of 70 countries during 2000-2011. The results of estimation indicate that there is a level of per-capita income approximately 18697 for life, 7492 for non-life insurance and 10392 for total industry in which the income elasticity of the demand for insurance reaches to the maximum, 1.63, 1.38 and 1.42 respectively. Also, the maximum and minimum of life, non-life and total industry penetrations will be 4.54, 2.9 and 7.44, and 0.75, 1.02 and 1.83 respectively.