Determinants Of Insurance Business Development In Ethiopia

This study examines the economic and demographic determinants of insurance business development in Ethiopia. The study adopted the autoregressive distributed lag ( ARDL) regression model on 38 annual secondary time series data covering the period from 1980 to 2017. The finding of the study shows that income, economic growth, financial development, urbanization, and trade openness have a positive and statistically significant relationship with life insurance business development. On the other hand, inflation has a negative and statistically significant relationship with life insurance demand. Further, regarding the non-life insurance, the study finds that the variable income, trade openness, and urbanization has a positive and statistically significant influence and inflation has a negative and statistically significant impact. The study suggests that insurance companies and other participants of the insurance industry should have considered these factors toward enhancing the level of the country's insurance business development.

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