Factors affecting the insurance sector development: Evidence from Albania

• Main Authors: Eglantina Zyka, Elena Myftaraj (Tomori)
• Format: Article
• Language: English
• Published: Editura ASE Bucuresti 2014-03-01
• Series: Romanian Economic Journal
• Subjects: insurance sector; factors; cointegration regression; Albania
• Online Access: http://www.rejournal.eu/article/factors-affecting-insurance-sector-development-evidence-albania

In this paper we explore factors potentially affecting the size of Albanian insurance market, over the period 1999 to 2009. The results of co- integration regression show that GDP and fraction urban population, both one lagged value, size of population and paid claims, both at contemporary value, have significant positive effect on aggregate insurance premium in Albania while the market share of the largest company in the insurance market, one lagged value, has significant negative effect on aggregate insurance premiums. Granger causality test shows statistically significance contribution of GDP growth to insurance premium growth, GDP drives insurance premium growth but not vice versa. The Albanian insurance market is under development, indicators as: insurance penetration, premium per capita, ect are still at low level and this can justify the insignificant role of the insurance in the economy