Abstract

This paper conducts an empirical analysis of the relationship between life insurance market development and economic growth in the Middle East and North Africa (MENA) region. The study examines data from 15 countries over the period from 1999 to 2023. This is accomplished by employing panel unit root tests, panel cointegration inquiries and pooled mean group (PMG) estimation to uncover potential causal relationships. The results pertinently demonstrate a substantial and positive long-term relationship between the life insurance sector and economic growth in the MENA region. They reveal that there is evidence in support of supply-leading hypothesis rather than the demand-following hypothesis. This long-term connection suggests that advancements and expansions within the life insurance industry are significantly associated with, and potentially contribute to, overall economic growth in the region. Enhancing the life insurance sector may be a proactive strategy to promote economic development, rather than a reaction to economic growth. Therefore, policymakers should promote insurance literacy, establish a supportive regulatory framework and provide tax incentives so as to enhance the uptake of life insurance. Furthermore, promoting financial inclusion, deploying digital platforms, and encouraging public-private partnerships can enhance the growth of life insurance, thereby contributing to broader economic development.

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