AN EMPIRICAL INVESTIGATION OF THE RELATIONSHIP BETWEEN THE INSURANCE INDUSTRY AND THE ECONOMIC GROWTH IN TURKEY

Insurance provides risk management by providing compensation for potential losses of people. The insurance sector, which is an important part of the financial sector, can have a positive impact on economic growth. This effect is mainly due to the reliability and stability of the insurance, the private savings, and the resource-increasing feature of the financial sector. In recent years, it has been given importance to investigate the relationship between insurance and economic growth. In Turkey, which has a significant potential in terms of economic growth, there is a limited study on the relationship between insurance and growth, since the insurance activities have just started to widen. Accordingly, the aim of this study is to fill in this gap and explore this relation between the insurance sector and economic growth for Turkey. For this purpose, by applying annual data between 1983-2020, the relationship between insurance premiums, penetration rate and economic growth in Turkey is analyzed by Pesaran et al. (2001) ARDL method. The Bound test results show that there is a long-term relationship among the variables. According to the ARDL result, while a significant relationship was measured between the total insurance premium and economic growth in the long run, no significant relationship was found between the penetration rate and economic growth.