Identify goods/services which are related to insurance company.

Question

Identify goods/services which are related to Insurance company. What are some of the key determinants of demand for this and related goods/services ?

I didn't find if someone can help me

Answer 1

Hi Emeline:

Because insurance is a commodity like electricity, natural gas, water, etc, (i.e. undifferentiated products that everyone needs) the demand for insurance is not affected by ups and downs in the economy. Whether the economy is up or down, people still have to buy insurance to protect their assets. Since automobile liability insurance is mandatory in 49 of the 50 United States, for example, the demand for it will be unaffected by what's going on with the economy.

You could say that if the economy is robust, people have to buy more insurance on the additional goods they purchase with increased incomes, e.g. houses. But when the economy falls, people still have those assets that need to be insured; they don't just go out and cancel their insurance.......the demand remains constant.

I think it would be safe to say that the demand for insurance tracks with other undifferentiated products (commodities).

I hope this helps.