Revisiting The Impact of Insurance on Eocnomic Growth: A Study of Malaysia and Singapore

The objective of this study is to ascertain the short-term and long-term relationship between insurance and economic growth in Malaysia and Singapore from 1990 to 2022. Government debt and government expenditure are included as control variables, leading to the formulation of separate models for each country. The study employs the Autoregressive Distributed Lag (ARDL) dynamic analysis method. The findings reveal that, concerning the government debt model and expenditure model, both Malaysia and Singapore exhibit a long-term relationship. In the government debt model and expenditure model, a short-term relationship is identified with Error Correlation Model (ECM). As a result, the study confirms the positive impact of insurance on economic growth both in short-term and long-term in Malaysia, while the impact of insurance on economic growth is asymmetric in Singapore. this study found that insurance plays a more significant role in the developing economy compared to developed economy. Therefore, this study recommends that policymakers should encourage individuals to invest in insurance, as it proves beneficial to the economy in both the short and long run.