Abstract:

Insurance protects persons and assets against risks. Through the primes paid to insurance companies, a significant resource of savings is created for the country’s economies and funds are provided to capital markets. In other words, the insurance sector contributes to the healthy process of the financial economy, which is the complementary of the real economy. This study has been tried to provide general information about insurance and has been tested in the example of the insurance sector and the economic growth relationship of Turkey, which is a topic frequently studied in foreign literature. The study applied the ARDL border test to investigate the long-term relationship. The error correction model was predicted to explain the short-term relationship after the ARDL test. Analysis used quarterly data consisting of the 2010Q1-2018Q4 period range, 36 observations. According to the results obtained in Turkey, there is a statistically meaningful relationship between the insurance sector and economic growth both in the long term and in the short term. This finding is consistent with both theoretical expectations and the results of the empirical studies that have been done before. However, according to the development of Turkey, the insurance sector will continue to develop. Policy makers should carefully monitor the sector that is largely under the control of foreign capital. In this regard, structural arrangements should be implemented and the barriers in front of the sector should be removed. In the end, the sector concerned is both natural disasters, fires, accidents, etc. It is vital in the removal of damages as well as in terms of the depth of financial markets.