The role of insurance growth in economic growth: Fresh evidence from a panel of OECD countries

Nicholas Apergis () and Thomas Poufinas

The North American Journal of Economics and Finance, 2020, vol. 53, issue C

Abstract: Insurance is one of the key activities in a globalised financial and economic environment. Through its benefits, it offers income, life and property protection to the insured and their keens, as well as income accumulation that can be used at retirement to help preserve the desired lifestyle or living standards. Motivated by this end of insurance, the goal of this paper is to study the contribution of insurance growth to economic growth, by employing the benefit side of the insurance activity, next to the acquisition side that has already been considered. More precisely, the findings provide evidence that gross claims payments and gross operating expenses are significantly and positively related to economic growth. At the same time, the results confirm the findings of the existing literature that gross premia and insurance penetration are also significantly and positively related to economic growth. The outcomes hold true for total, life and non-life insurance, both during the pre- and post- 2008-crisis periods, even though less strong after the crisis. Furthermore, the positive and statistically significant impact of gross capital formation, government expenditure, secondary schooling, FDI inflows, trade openness and financial development is validated, in line with certain theoretical expectations.

Keywords: Insurance growth; Economic growth; Premium; Retention; Macroeconomic variables (search for similar items in EconPapers)
JEL-codes: E44 F43 G22 O43 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (16)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecofin:v:53:y:2020:i:c:s1062940820301145

DOI: 10.1016/j.najef.2020.101217

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