Existing research on how international insurance demand varies with income is largely driven by cross-sectional variation post-1970. Drawing on newly collected historical long-run data on life insurance premiums starting as early as 1850 to 2020 for 20 OECD countries, we evaluate the ‘S-Curve’ predicting insurance demand as each country transitions through different income levels. In contrast to predictions in the literature, we reject the ‘S-curve’, but identify a two-bump curve with two high-elasticity episodes, one driven by a massive expansion of life insurance contracts at the end of the 19th century to ensure mortality risks and the other in the late 20th century driven by a shift to savings products. This could imply that the longitudinal catching-up process of countries with low insurance density may be steeper than what the cross-sectional ‘S-Curve’ would suggest.
