The study examines the contribution of Ethiopian Insurance industry to the economicrngrowth. It analyses both the long run and short run dynamics among importantrndeterminants of variables over the period 37 years (1980-2016). Using unit root tests andrnJohansen Co integration tests are applied to investigate relationship among the variablesrnrespecting. Error correction model has been used to analysis the long run and short runrnmovements of variables. A pair wise granger causality test has also used to examine therncausal relationship among the variables in the model.rnThe study observed that there is long run relationship between insurance developmentrnand economic growth in Ethiopia. The regression result indicated that insurancernpremium and insurance claim has significant and negative relationship with economicrngrowth in the long run and short run dynamics. However insurance profit has positivernsignificant and insurance investment has positive but insignificant relation with economicrngrowth. The result of granger causality test indicates that there is unidirectionalrnrelationship from economic growth to insurance premium, insurance claim andrninsurance profit. It also shows bidirectional relationship between economic growth andrninsurance profit. However insurance investment has no causal relation with any variablernin short run. The implication of this finding is that there is a causal relationship betweenrninsurance performance and economic growth. The study concludes that the economicrngrowth has positive impacts on the growth of insurance development.