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How Do Life And Non-Life Insurance Affect Financial Inclusion? New Empirical Evidence From A Cross-Country Analysis

Author

Listed:
  • Shen Yap

    (Universiti Tunku Abdul Rahman)

  • Hui Shan Lee

    (Universiti Tunku Abdul Rahman)

  • Ping Xin Liew

    (Universiti Tunku Abdul Rahman)

Abstract

This paper examines the influence of life and non-life insurance on financial inclusion in 79 countries during 2019. Financial inclusion indices were calculated using the Euclidean distance approach. The study reveals that the financial inclusion level is considerably impacted by the integration of insurance indicators. In over 64% of the countries, the financial inclusiveness is reduced as a result of the incorporation of life insurance. In contrast, the financial inclusiveness of nearly 47% of the countries was enhanced by the inclusion of non-life insurance. The paper emphasizes the necessity for policymakers to take insurance into account as a critical element of financial inclusion strategies and measures, providing valuable insights for improving global financial inclusiveness.

Suggested Citation

  • Shen Yap & Hui Shan Lee & Ping Xin Liew, 2025. "How Do Life And Non-Life Insurance Affect Financial Inclusion? New Empirical Evidence From A Cross-Country Analysis," Bulletin of Monetary Economics and Banking, Bank Indonesia, vol. 28(1), pages 117-144, April.
    • Handle: RePEc:idn:journl:v:28:y:2025:i:1f:p:117-144
    DOI: https://doi.org/10.59091/2460-9196.1977
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    More about this item

    Keywords

    Life insurance; Non-life insurance; Financial inclusion; Euclidean distance approach; Principal component analysis;
    All these keywords.

    JEL classification:

    • C38 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Classification Methdos; Cluster Analysis; Principal Components; Factor Analysis
    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General

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