Life Insurance Development and Economic Growth in Sub Saharan Africa: A Panel Ardl Approach

This paper examines the effect of life insurance development on economic growth in twelve Sub-Saharan African (SSA) countries; Benin, Botswana, Côte d’Ivoire, Ghana, Kenya, Mauritius, Namibia, Nigeria, South Africa, Tanzania, Uganda, and Zambia, over the period 2000–2024. Real GDP per capita growth is modelled as a function of life insurance penetration, life insurance density, gross insurance premium, and a set of macroeconomic controls (capital accumulation, labour, trade openness and inflation), using the Pooled Mean Group (PMG) estimator within an Autoregressive Distributed Lag (ARDL) framework, complemented by Dumitrescu–Hurlin panel causality tests. The results show that life insurance penetration, density and gross premium each exert a statistically significant, positive effect on economic growth in the long run, while inflation exerts a significant negative effect. Short-run effects are generally weak, and the error-correction coefficients indicate a slow pace of adjustment toward long-run equilibrium. Causality tests reveal a unidirectional relationship running from each of the life insurance indicators to economic growth, implying an insurance-led growth pattern in the region. The study concludes that deepening life insurance markets — through microinsurance, digital distribution, tax incentives and stronger regulatory frameworks — can meaningfully support sustainable growth in SSA, and offers policy recommendations accordingly.