Insurance and the Macroeconomic Environment

Casper Christophersen and Petr Jakubík

No 1, EIOPA Financial Stability Report - Thematic Articles from EIOPA, Risks and Financial Stability Department

Abstract: Insurance companies play an important role in the financial sector and the availability of insurance products is an essential element of sustainable economic growth. This article analyses the relationship between growth in the insurance sector and key macroeconomic determinants using a European panel data set published by EIOPA. We focus on gross written premiums (GWP) to capture insurance market growth. Our empirical analysis reveals a high GWP persistence as well as a strong link between GWP and economic growth and unemployment. Moreover, the estimated model suggests a higher sensitivity to the macroeconomic environment for life compared to non-life insurance. Finally, there is also empirical evidence that insurers expand their international activities in periods when domestic growth opportunities are low. These findings can be used to underpin a quantitative financial stability framework to assess the potential impact of different macroeconomic scenarios on insurance market growth.

Keywords: Gross written premiums; insurance; macroeconomic environment; quantitative financial stability framework (search for similar items in EconPapers)
JEL-codes: E27 G22 G28 (search for similar items in EconPapers)
Pages: 11 pages
Date: 2014-06
New Economics Papers: this item is included in nep-gro and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Published in Financial Stability Report, EIOPA, May 2014, pages 43-53

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Persistent link: https://EconPapers.repec.org/RePEc:eio:thafsr:1

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