An empirical examination to the factors affecting the growth of insurance market in India

Insurance sector act is an important factor for economic development of a country because it acts as a financial intermediation as well as provider of risk transfer and indemnification. The growth of insurance sector is measured through insurance density. Strength of Insurance density depends on different economic, social and demographic determinants like inflation, FDI, education of individual, life expectancy etc. Objective of this study is to identify the determinants of insurance growth and measure the effect of those factors on insurance growth in Indian context. Sixteen years (1999 to 2014) data has been taken from World Bank database and Multiple Regression Method is used for conducting this study. Result of this study reveals that education, fdi inflow and openness ratio have significant and positive effect on the growth of Insurance industry. In other words, present study indicates that educational growth of a country has highly positive impact on insurance density and life expectancy has a negative impact on insurance density. Present study extends the study on insurance sector because limited studies are undertaken to indentify the determinants of insurance density in India.