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Corresponding Author:
Mphumzi Makeleni, Department of Economics, University ot the Western Cape

Coauthors:
Johannes Sheefeni, Department of Economics, University of the Western Cape, Cape Town, South Africa

Life Insurance and Economic Growth in South Africa

Volume 75 - Issue 2, May 2022
(pp. 213-240)
JEL classification: G21, G22, G23
Keywords: Economic Growth, Life Insurance, ARDL, Cointegration, South Africa

Abstract

The connection between the real economy and the financial sector continues to be a subject of debate amongst scholars. Particularly, the role of financial intermediaries in promoting growth. Thus, this study examined the relationship between life insurance and economic growth in South Africa for the period 1994 to 2018. The study made use of the insurance penetration ratio as the proxy for insurance development and gross domestic product per capita as the proxy for economic growth. The results of the estimated long and short run relationship reveal that both life and non-life insurance individually impacts economic growth positively. On the other hand, the results for both the long and short run revealed that total insurance impacts negatively on economic growth. The policy implications of the findings are that policies which encourage the growth of the life insurance sector would meaningfully contribute to economic growth.

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Institute for International Economics of the Genoa Chamber of Commerce

Institute for International Economics
of the Genoa Chamber of Commerce