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The relationship between the insurance sector and economic growth has received significant attention in the financial economics literature, but empirical results are still fragmented, methodologically diverse, and uneven across regions. This study systematically reviews global evidence regarding the interplay between insurance and economic growth, examining the underlying causes, methodologies employed, and regional disparities. Adhering to the Preferred Reporting Items for Systematic Reviews and Meta-Analyses (PRISMA) guidelines, we searched the Scopus database and identified 87 peer-reviewed studies published between 1996 and 2024. The results indicate that the relationship between insurance and economic development is context-dependent and heavily influenced by local institutions and financial systems. In advanced economies, there tends to be a two-way relationship, whereas in emerging markets, supply is generally the driver of growth. In addition, life insurance is generally more linked to economic growth than non-life insurance. Although methodological advancements from traditional time-series analyses to more sophisticated panel models, such as vector autoregression (VAR), the generalized method of moments (GMM), and autoregressive distributed lag (ARDL), have improved causal inferences, the inconsistent application of quality standards and the lack of studies from Latin American and MENA (Middle East and North Africa) countries limit the broader applicability of these findings. Future research should investigate non-linear relationships and institutional factors, employ robust validation methods, and incorporate innovations related to climate and insurance. Policymakers are encouraged to adopt differentiated strategies: enhancing financial access and regulatory frameworks in developing nations while fostering innovation and stability in established insurance markets.
Kasmi et al. (Fri,) studied this question.