The determining factors of demand for life insurance: PLS method applied to the case of OECD and MENA countries

Abstract

PurposeThis article provides a comparative analysis of the relationship between insurance and economic growth in the Organization for Economic Cooperation and Development (OECD) and Middle East and North Africa (MENA) regions. The research aims to understand how insurance impacts economic growth in these two regions, highlighting the similarities and differences between them.Design/methodology/approachThe study analyzes economic and insurance data from various countries in the OECD and MENA regions over a specific period. It employs the statistical method of Partial Least Squares (PLS) univariate regression to examine the relationships between the variables.FindingsThe study finds a positive correlation between insurance and economic growth in both regions, though the characteristics and mechanisms differ. In the OECD region, where insurance markets are more developed, insurance is strongly linked to economic growth. In contrast, the MENA region, with lower levels of insurance and a less developed industry, still shows a positive effect of insurance on economic growth. The article also identifies factors specific to the OECD and MENA regions that influence this relationship, such as insurance industry regulation, access to financial services, economic and political stability and cultural and institutional differences.Originality/valueThe originality of this research lies in its use of the PLS regression method, setting it apart from previous studies in the same field that have typically relied on other econometric techniques.