Does Insurance Market Activity Promote Economic Growth?

Does Insurance Market Activity Promote Economic Growth? PDF

Author: Marco Arena

Publisher:

Published: 2006

Total Pages: 28

ISBN-13:

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Insurance market activity, both as a financial intermediary and a provider of risk transfer and indemnification, may contribute to economic growth by allowing different risks to be managed more efficiently and by mobilizing domestic savings. During the past decade, there has been faster growth in insurance market activity, particularly in emerging markets given the process of liberalization and financial integration, which raises questions about its impact on economic growth. The author tests whether there is a causal relationship between insurance market activity (life and nonlife insurance) and economic growth. Using the generalized method of moments for dynamic models of panel data for 56 countries and for the 1976-2004 period, he finds robust evidence of a causal relationship between insurance market activity and economic growth. Both life and nonlife insurance have a positive and significant causal effect on economic growth. High-income countries drive the results in the case of life insurance. On the other hand, both high-income and developing countries drive the results in the case of nonlife insurance.

Does Insurance Market Activity Promote Economic Growth? Country Study for Industrial and Developing Countries

Does Insurance Market Activity Promote Economic Growth? Country Study for Industrial and Developing Countries PDF

Author: Marco Arena

Publisher:

Published: 2016

Total Pages: 22

ISBN-13:

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Insurance market activity, both as a financial intermediary and a provider of risk transfer and indemnification, may contribute to economic growth by allowing different risks to be managed more efficiently and by mobilizing domestic savings. During the past decade, there has been faster growth in insurance market activity, particularly in emerging markets given the process of liberalization and financial integration, which raises questions about its impact on economic growth. The author tests whether there is a causal relationship between insurance market activity (life and nonlife insurance) and economic growth. Using the generalized method of moments for dynamic models of panel data for 56 countries and for the 1976-2004 period, he finds robust evidence of a causal relationship between insurance market activity and economic growth. Both life and nonlife insurance have a positive and significant causal effect on economic growth. High-income countries drive the results in the case of life insurance. On the other hand, both high-income and developing countries drive the results in the case of nonlife insurance.

The Economics, Regulation, and Systemic Risk of Insurance Markets

The Economics, Regulation, and Systemic Risk of Insurance Markets PDF

Author: Felix Hufeld

Publisher: Oxford University Press

Published: 2016-10-28

Total Pages: 247

ISBN-13: 0191093173

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Despite the importance of insurance in enabling individual and collective social, economic, and financial activities, discussions about the macroeconomic role and risks of insurance markets are surprisingly limited. This book brings together academics, regulators, and industry experts to provide a multifaceted array of research and perspectives on insurance, its role and functioning, and the potential systemic risk it could create. The first part discusses the macroeconomic role of insurance and how insurance is different from banking and general finance. Understanding the differences between the balance sheets of insurers and other financial intermediaries is essential for understanding the potential differences in risk nature and optimal regulation. The second part of the book focuses on the risks managed by the insurance sector and the potential for systemic risk. The chapters discuss the risks both on the asset and liability sides of insurers' balance sheets. The third part of the book covers the impact of regulation on insurance companies. Existing regulation is often complex and has a large impact on insurance companies' decision-making and functioning. The chapters also illustrate the unintended consequences of various forms of regulation. The book concludes with a summary of a survey that has been conducted in collaboration with McKinsey, where insurance executives have been asked about the risks and regulation in the insurance sector. The survey provides guidance for future research on insurance markets.

Does Insurance Market Activity Promote Economic Growth?

Does Insurance Market Activity Promote Economic Growth? PDF

Author: Marco Arena

Publisher: World Bank Publications

Published: 2006

Total Pages: 22

ISBN-13:

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Abstract: Insurance market activity, both as a financial intermediary and a provider of risk transfer and indemnification, may contribute to economic growth by allowing different risks to be managed more efficiently and by mobilizing domestic savings. During the past decade, there has been faster growth in insurance market activity, particularly in emerging markets given the process of liberalization and financial integration, which raises questions about its impact on economic growth. The author tests whether there is a causal relationship between insurance market activity (life and nonlife insurance) and economic growth. Using the generalized method of moments for dynamic models of panel data for 56 countries and for the 1976-2004 period, he finds robust evidence of a causal relationship between insurance market activity and economic growth. Both life and nonlife insurance have a positive and significant causal effect on economic growth. High-income countries drive the results in the case of life insurance. On the other hand, both high-income and developing countries drive the results in the case of nonlife insurance.

Insurance and Issues in Financial Soundness

Insurance and Issues in Financial Soundness PDF

Author: Nigel Davies

Publisher: International Monetary Fund

Published: 2003-07-01

Total Pages: 45

ISBN-13: 1451856008

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This paper explores insurance as a source of financial system vulnerability. It provides a brief overview of the insurance industry and reviews the risks it faces, as well as several recent failures of insurance companies that had systemic implications. Assimilation of banking-type activities by life insurers appears to be the key systemic vulnerability. Building on this experience and the experience gained under the FSAP, the paper proposes key indicators that should be compiled and used for surveillance of financial soundness of insurance companies and the insurance sector as a whole.

Handbook of International Insurance

Handbook of International Insurance PDF

Author: J. David Cummins

Publisher: Springer Science & Business Media

Published: 2007-12-23

Total Pages: 1000

ISBN-13: 0387341633

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Handbook of International Insurance: Between Global Dynamics and Local Contingencies analyzes key trends in the insurance industry in more than 15 important national insurance markets that represent over 90 percent of world insurance premiums. Well-known academics from Europe, the Americas and Asia examine their own national insurance markets, including the competitive structure, product and service innovations, and regulatory developments. The book provides academics and executives with an unprecedented range of information about today’s insurance markets. This book also provides important 'new' information on the evolution of the financial sector worldwide and comprehensive chapters on reinsurance, Lloyd’s of London, alternative risk transfer, South and East Asian insurance markets, and European insurance markets. Setting the stage is an overview chapter by the editors focusing on overall conclusions on globalization.

Does Insurance Development Promote Economic Growth? Evidence from India

Does Insurance Development Promote Economic Growth? Evidence from India PDF

Author: CFA Chopra (Monika)

Publisher:

Published: 2018

Total Pages:

ISBN-13:

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Insurance as a component of financial system, makes economic activities possible, as well as contributes to the growth of the economy's size, employment, managed assets etc. The current paper examines the relationship between the development of insurance sector and economic growth as well as factors contributing to the growth of insurance sector in India. It studies life insurance density and penetration as well as, non-life insurance density and penetration and links them to GDP growth. Later, demographic factors such as age dependency ratio, urban population growth, life expectancy and adult literate population are checked for explaining insurance density and penetration. Using Granger Causality, cointegration within VECM framework, the study finds long run causality between insurance development and economic growth. Further using ARDL bounds approach, a long run causality between life expectancy and insurance development was found. The study concludes by pointing the role of risk aversion due to life uncertainty in insurance development and importance of insurance development in economic growth, with scope of further research on similar lines by considering the role of insurance and its broader investigations.

Merits of Life Insurance

Merits of Life Insurance PDF

Author: Elma Satrovic

Publisher: GRIN Verlag

Published: 2018-09-10

Total Pages: 183

ISBN-13: 3668792755

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Document from the year 2018 in the subject Economics - Finance, grade: 14, University of Sarajevo, language: English, abstract: In this book linear panel data estimators are employed to investigate the relationship between life insurance and economic growth. This study contributes to previous studies by using Maximum likelihood estimation of dynamic panel that was not used in previous studies concerning the aforementioned relationship; by controlling for number of factors thought to influence economic growth; by referring to a much larger number of countries and by exploring the relationship between life insurance and economic growth while controlling for the degree of financial sector development, as well as for the regional and income disparities. Sixteen models that explore the impact of control variables integrated singly in the equations and an integrated model that controls for the impact of all key variables are estimated. Empirical results reveal a significant positive relationship between life insurance and economic growth in models -. Education is reported to have a positive impact on economic growth. Government spending is found to have a negative impact on economic growth, while model reports that inflation has a negative impact on economic growth. Trade openness is not reported to have a significant impact on economic growth in model. Model reveals a significant positive impact of banking sector on economic growth; significant negative impact of non-life insurance sector while stock market is not reported to have a significant impact. An integrated model that controls for the impact of all key variables gives a strong support to the results obtained in models -. Results of models - that attempt to control for the importance of regional disparities indicate that a significant positive relationship between life insurance and economic growth is reported for all regions but South Asia and North America. Models - that additionally control for differences in levels of development reveal a significant positive relationship between life insurance and economic growth in high-, middle- and low-income countries.

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