Insurance Development and Macroeconomic Growth Analysis of Selected Asian Countries

Abstract

Economic growth and its sustainability has long been the focus of debate newlinefor both academic researchers and policy makers. A large number of attempts newlinehave been made to extensively list the factors that may have an impact on newlineeconomic growth and the role of insurance as the factor of growth also got newlinerecognition. newlineInsurance sector plays an important in augmenting economic growth by newlinemanaging the risk involved in the investment decisions. Insurance companies newlinemobilise savings from surplus spending units to the deficit spending units and newlinethus, help in financing the investment in the real sector. Insurance sector also newlinecontribute to the economic growth by promoting financial stability, facilitating newlinetrade and commerce, mobilizing savings, allowing risks to be managed more newlineefficiently, encouraging loss mitigation; and by fostering a more efficient newlineallocation of capital. Insurance services enhance marginal productivity of newlinecapital, technological innovation and savings rate in the economy. newlineWith such significance of insurance sector in the economic growth of a newlinecountry, a number of studies have been undertaken to find the causal newlinerelationship between them. However, there is no consensus among the existing newlinestudies about the causal relationship between insurance and economic growth. newlineIn this backdrop, the present study is an attempt to analyse the newlinerelationship between insurance development and macroeconomic growth in the newlinecontext of 14 Asian countries in the multivariate neo-classical framework with newlinespecific research objectives like to evaluate the trend and progress of the newlineinsurance sector development in the selected Asian economies; to explore the newlinelevel of disparity in the insurance sector development across selected Asian newlineeconomies; to investigate the relationship between the development of life newlineinsurance sector and economic growth in the selected Asian economies; to newlineinvestigate the relationship between the development of non-life insurance newlinesector and economic growth in the selected Asian economies; to investigate the newlinerelationship b