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EJCE Year: 2021, December. Volume: 18 - Issue: 2

Does insurance market impact the economic growth? Evidence from Albania

by Gentiana Sharku, Evis Kumi

Start page: 267 - End page: 289

Keywords: Insurance market, Economic growth, Albania

Jel code: F43; G22

DOI: 10.25428/1824-2979/001

Abstract:

Insurance plays a significant role in the economy development all over the world, being an important source of capital accumulation and investment. This paper studies the long run dynamic relations between economic growth and the insurance market in Albania. Using secondary quarterly data from 2005 to 2018, we have taken into consideration three main indicators of the insurance market: (i) life and non-life insurance volume; (ii) life and non-life insurance density and (iii) life and non-life insurance penetration index. The data analysis is carried through Johansen’s vector error-correction model. The findings of the study revealed no long run relation between economic growth and insurance market, when the employed indicators are the premium volume and the penetration index. On the other hand, when the insurance market is measured by the density index, we found a long run negative relation between growth and life insurance activity and a long run positive relationship between growth and non-life insurance activity.

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