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Insurance and the Macroeconomic Environment


  • Casper Christophersen
  • Petr Jakubik



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.

Suggested Citation

  • Casper Christophersen & Petr Jakubik, 2014. "Insurance and the Macroeconomic Environment," EIOPA Financial Stability Report - Thematic Articles 1, EIOPA, Risks and Financial Stability Department.
  • Handle: RePEc:eio:thafsr:1

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    References listed on IDEAS

    1. Lee, Chien-Chiang & Lee, Chi-Chuan & Chiu, Yi-Bin, 2013. "The link between life insurance activities and economic growth: Some new evidence," Journal of International Money and Finance, Elsevier, vol. 32(C), pages 405-427.
    2. Christophe Faugere & Julian Van Erlach, 2003. "The Equity Premium: Explained by GDP Growth and Consistent with Portfolio Insurance," Finance 0311004, University Library of Munich, Germany.
    3. Teresa Bianchi & Gernot Ebner & Raimund Korherr & Eva Ubl, 2011. "The Austrian Insurance Industry in CESEE: Risks and Opportunities from a Financial Stability Point of View," Financial Stability Report, Oesterreichische Nationalbank (Austrian Central Bank), issue 22, pages 88-106.
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    Cited by:

    1. Petr Jakubik & Diana Zigraiova, 2016. "Updating the Long Term Rate in Time: A Possible Approach," EIOPA Financial Stability Report - Thematic Articles 9, EIOPA, Risks and Financial Stability Department.
    2. Md. Bokhtiar Hasan & SM Nahidul Islam & Abu N. M. Wahid, 2018. "The effect of macroeconomic variables on the performance of non-life insurance companies in Bangladesh," Indian Economic Review, Springer, vol. 53(1), pages 369-383, December.
    3. Cristea Mirela & Danciulescu Andreea-Gabriela, 2016. "The Impact Of The Unemployment Rate On The Insurance Development In Romania. Statistical Approaches," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 1, pages 186-192, December.
    4. Diana Zigraiova & Petr Jakubik, 2017. "Updating the Ultimate Forward Rate over Time: A Possible Approach," Working Papers 2017/03, Czech National Bank.
    5. Martin Hodula & Jan Janku & Martin Casta & Adam Kucera, 2020. "On the Determinants of Life and Non-Life Insurance Premiums," Working Papers 2020/8, Czech National Bank.
    6. Ishtiaq Ahmad, 2017. "Do The Economic Indicators Influence Financial Performance Of Non-Life Insurance Sector In Pakistan?," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(2), pages 201-209, December.
    7. Cristina Dorofti & Petr Jakubik, 2015. "Insurance Sector Profitability and the Macroeconomic Environment," EIOPA Financial Stability Report - Thematic Articles 4, EIOPA, Risks and Financial Stability Department.

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    More about this item


    Gross written premiums; insurance; macroeconomic environment; quantitative financial stability framework;
    All these keywords.

    JEL classification:

    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • E27 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Forecasting and Simulation: Models and Applications

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