Life Insurance Development and Economic Growth: Evidence from Developing Countries

This article examines the relation between the development of life insurance sector and economic growth, for a sample of 86 developing countries over the period 1996-2011. We also examine the heterogeneous effect of life insurance on growth. The econometric results show on the one hand that the development of life insurance has a positive effect on economic growth per capita and, on the other hand, that this effect varies according to the structural characteristics of countries. Thus, the marginal positive impact of the development of life insurance decreases with the levels of deposit interest rate, bank credit and stock market value traded, while the effect is greater in countries with high-quality institutions. Finally, life insurance effect on growth is less for SSA and British legal system countries, compared to non-SSA and non-British legal system countries