What is the true effect of insurance activity on economic growth? a meta-analysis

The connection of insurance activity and economic growth has been a widely investigated topic due to numerous papers and research attempts performed so far. The results, however, often differ among individual studies. Therefore a comprehensive analysis of the significance of causality from insurance activity, measured by insurance premium, to business cycle fluctuation, is well-required.

Using 20 published and unpublished studies, we conduct a meta-analysis of the literature on the impact of insurance activity on economic growth. Insurance premium is taken as the measure of insurance activity. The combined significance test of individual t-statistics is employed along with OLS- type meta-regression. Evidence for publication selection bias was detected employing the funnel asymmetry test. As the results of individual studies are heterogeneous, we provide a comprehensive evidence of the effect size concerning the impact of insurance sector activity on economic growth. The calculation of the effect size allows understand the true effect relying on synthesis of so far published research with significantly higher amount of observations and better precision. Objectively evaluated results are particularly important for policy makers who set the policy towards subjects in the insurance market, i.e. insurers, reinsurers, insurance intermediaries and policy holders who primarily influence the market´s development. The results help formulate research project proposals that relate to the field of insurance premium and its relation to economic growth.

We also discuss the importance and implications of research on the inverse causality from economic growth to insurance sector activity as no meta-analysis on this topic was published either.