Open AccessFinancial Development and Life Insurance Demand in Sub-Sahara Africa
Author(s) -
Osama Ose Iyawe,
Ifuero Osad Osamwonyi
Publication year - 2017
Publication title -
international journal of financial research
Language(s) - English
Resource type - Journals
eISSN - 1923-4031
pISSN - 1923-4023
DOI - 10.5430/ijfr.v8n2p163
Subject(s) - cape verde , life insurance , developing country , economics , estimation , development economics , economic growth , business , geography , finance , actuarial science , ethnology , management , history
This study examines the relationship between financial development and life insurance demand in Sub-Saharan Africa with a sample of fifteen countries. These countries are Nigeria, South Africa, Namibia, Cameroon, Ghana, Cote d’Ivoire, Sudan, Kenya, Uganda, Mozambique, Togo, Benin, Senegal, Cape Verde and Zambia. The specific objectives are to determine the relative effect of financial depth, as well as major macroeconomic factors, preferences and life insurance demand in the sampled countries. It is argued in this study that the traditional textbook and theoretical factors driving demand for life insurance may not be extensively dominant in the case of Sub-Sahara Africa where low formal financial patronage are rife. Using annual data covering the period 1990 – 2011 (22 years), the study applies the panel data estimation, which allows for endogenization of individual country characteristics in the analysis. The model adopted in this study categorises all the necessary macroeconomic factors in the study that seek to explain both insurance penetration and insurance density for the sampled countries. The results of the study show that financial development in African countries drives life insurance demand than major macroeconomic factors.