INVESTIGATING THE GROWTH FACTORS OF NON-LIFE INSURANCE SECTOR IN INDIA - AN EMERGING MARKET PERSPECTIVE

Abstract

The insurance sector is considered as an imperative constituent of the financial industry basis its increasing significance in the financial intermediation and economic development of nations across the world. Growth of the insurance sector gets influenced by different factors that co-exist in an economy. This study intends to explore the factors that impact the growth prospects of Indian non-life insurance sector. Time series data for forty-three years were considered  using Auto-Regressive Distributed Lags (ARDL) technique to frame short-run and long-run models depicting relationship between growth of non- life insurance sector and demographic, macro-economic and socio-culture factors. To investigate co-integration, ARDL bounds testing technique was adopted. The study revealed that Education, Final Consumption Expenditure, Inflation, Dependency Ratios- Young & Old and Life Expectancy showed significantly positive impact on non-life insurance sector growth in India. The findings may help in framing appropriate policies to promote the development of non-life insurance sector.