Macroeconomic Determinants of Insurance Sector Development in Sri Lanka
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Date
2012
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Publisher
Uva Wellassa University of Sri Lanka
Abstract
Financial institutions play a prominent role in supporting economic development in Sri Lanka. In recent decades, insurance sector as a segment of financial institutions has contributed to the development of the economic activities of the country immensely. Macroeconomic environment is most influential on insurance sector development in Sri Lanka. Macroeconomic factors can be categorized as unemployment rate, inflation rate, percapita income, interest rate, and level of the stock market, exchange rate, growth rate of foreign direct investment, money supply and terms of trade.
This research attempted to examine the influence of macroeconomic determinants on insurance sector development. Domestic Investment, Inflation, Capital expenditure, Foreign Direct Investment (FDI), Growth Rate of Gross Domestic Production and Unemployment Rate were used as predictors of macroeconomic determinants and insurance sector development was measured by insurance premium. The study was designed to achieve the main objective of identifying relationship between macroeconomic determinants on insurance sector development in Sri Lanka. To observe the causality between macroeconomic determinants and insurance sector development was at the center of this study.
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Keywords
Entrepreneurship and Manangment, managment, Tourism