What drives the development of the insurance sector ? an empirical analysis based on a panel of developed and developing countries
AbstractThe insurance sector can play a critical role in financial and economic development. By reducing uncertainty and the impact of large losses, the sector can encourage new investments, innovation, and competition. As financial intermediaries with long investment horizons, insurance companies can contribute to the provision of long-term instruments to finance corporate investment and housing. There is evidence of a causal relationship between insurance sector development and economic growth. However, there have been few studies examining the factors that drive the development of the insurance industry. This paper contributes to the literature by examining the determinants of insurance premiums (both life and non-life premiums) and total assets for a panel of about 90 countries during the period 2000-08. The results show that life sector premiums are driven by per capita income, population size and density, demographic structures, income distribution, the size of the public pension system, state ownership of insurance companies, the availability of private credit, and religion. The non-life sector is affected by these and other variables. While some of these drivers are structural, the results also show that the development of the insurance sector can be influenced by a number of policy variables.
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Bibliographic InfoPaper provided by The World Bank in its series Policy Research Working Paper Series with number 5572.
Date of creation: 01 Feb 2011
Date of revision:
Debt Markets; Insurance Law; Emerging Markets; Insurance&Risk Mitigation; Economic Theory&Research;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-03-12 (All new papers)
- NEP-DEV-2011-03-12 (Development)
- NEP-IAS-2011-03-12 (Insurance Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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"An empirical analysis of the annuity rate in Chile,"
Journal of Pension Economics and Finance,
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- Marco Arena, 2008. "Does Insurance Market Activity Promote Economic Growth? A Cross-Country Study for Industrialized and Developing Countries," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 75(4), pages 921-946.
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