INSURANCE MARKET DEVELOPMENT: AN EMPIRICAL STUDY OF AFRICAN COUNTRIES

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Abstract

The insurance industry plays a very crucial role in an economy by fostering intermediation and by its mechanism of risk bearing. As such it could be argued that the insurance industry fosters economic growth. In this article we analyse the global insurance market development trends, particularly focusing on Africa. Our sample comprise of the 10 African countries namely—South Africa, Angola, Nigeria, Kenya, Mauritius, Namibia, Algeria, Tunisia, Morocco and Egypt. We employ three insurance market development metrics namely; premium volumes, insurance density and insurance penetrations ratios to establish trends in the level of development of global insurance markets. Our results document that the African countries (excluding South Africa) have the least developed insurance markets. For most of the countries in our sample, the non-life insurance industry dominates the life-insurance industry. As such, it is imperative that their respective governments put in place measures that will grow their economies inorder to stimulate the development of insurance markets in Africa.

Keywords: Insurance Market Development, Life Insurance, Non-Life Insurance, Insurance Penetration, Insurance Density, Causal, Africa

How to cite this paper: Sibindi, A.B. (2015). Insurance market development: An empirical study of African countries. Risk governance & control: Financial markets & institutions, 5(4-2), 319-330. https://doi.org/10.22495/rgcv5i4c2art6