Title: Financial and non-financial drivers of insurance sector in an emerging economy
Authors: S. Rajaram; P. Suganthi; H. Gin Chong
Department of Management Studies, Kalasalingam University, Krishnankoil – 626126, India
Bharathiar University, Coimbatore – 641046, India
College of Business, Prairie View A&M University, Prairie View, TX 77446, USA
Abstract: This paper identifies key factors that drive and impede the growth of the insurance sector in India. Emerging economies have huge growth potential. India is an economy that attracts opportunities for growth. The growth pattern in the last ten years is discussed highlighting a huge influx of foreign funds to the country, and benefits and challenges to stakeholders, and extent of oversights on insurance firms. Using the finance data from all the 23 insurance firms in India for the period from 2005 to 2014, we find that the growth in insurance sectors is related to first year and renewal premiums, commission and operating ratios, individual and corporate agents, offices, capital and assets, and profits, and is not related to new products, investment income and claims ratio. The sector's contribution to economic growth is also shown. The findings have ramifications for the sector's providers, regulators and investors.
Keywords: life insurance industry; emerging economies; performance; causal relationship; economic growth; insurers; financial drivers; non-financial drivers; India.
Int. J. of Accounting and Finance, 2015 Vol.5, No.4, pp.307 - 337
Date of acceptance: 14 Dec 2015
Available online: 26 Apr 2016