Determinants of Insurance Penetration in West African Countries: A Panel Auto Regressive Distributed Lag Approach

Odunayo Olarewaju and Thabiso Msomi
Additional contact information
Odunayo Olarewaju: Department of Management Accounting, Faculty of Accounting and Informatics, Ritson Campus, Durban University of Technology, Durban 4000, South Africa
Thabiso Msomi: Department of Management Accounting, Faculty of Accounting and Informatics, Ritson Campus, Durban University of Technology, Durban 4000, South Africa

JRFM, 2021, vol. 14, issue 8, 1-15

Abstract: This study analyses the long- and short-term dynamics of the determinants of insurance penetration for the period 1999Q1 to 2019Q4 in 15 West African countries. The panel auto regressive distributed lag model was used on the quarterly data gathered. A cointegrating and short-run momentous connection was discovered between insurance penetration along with the independent variables, which were education, productivity, dependency, inflation and income. The error correction term’s significance and negative sign demonstrate that all variables are heading towards long-run equilibrium at a moderate speed of 56.4%. This further affirms that education, productivity, dependency, inflation and income determine insurance penetration in West Africa in the long run. In addition, the short-run causality revealed that all the pairs of regressors could jointly cause insurance penetration. The findings of this study recommend that the economy-wide policies by the government and the regulators of insurance markets in these economies should be informed by these significant factors. The restructuring of the education sector to ensure finance-related modules cut across every faculty in the higher education sector is also recommended. Furthermore, Bancassurance is also recommended to boost the easy penetration of the insurance sector using the relationship with the banking sector as a pathway.

Keywords: gross domestic product; insurance penetration; panel auto regressive distributed lag; bancassurance (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
https://www.mdpi.com/1911-8074/14/8/350/pdf (application/pdf)
https://www.mdpi.com/1911-8074/14/8/350/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jjrfmx:v:14:y:2021:i:8:p:350-:d:605251

Access Statistics for this article

JRFM is currently edited by Ms. Chelthy Cheng

More articles in JRFM from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().