ABSTRACT
This study examines the determinants of insurance patronage across six prominent African economies—South Africa, Nigeria, Kenya, Egypt, Ghana, and Ethiopia—spanning the period from 2015 to 2021. By analyzing the influence of key variables, including inflation rate, per capita income, economic growth, and insurance premium, we aim to shed light on the factors shaping insurance participation in these dynamic economies. Through a pooled cross-sectional panel data approach, the study employs a series of advanced econometric techniques to explore the intricate relationships among the variables. The apex of this study is the application of the Error Correction Model (ECM), which captures both short-term dynamics and long-term equilibrium relationships. The study’s findings reveal that inflation rate, per capita income, economic growth, and insurance premium are significant determinants of insurance patronage in African countries. Moreover, our study highlights the presence of stable equilibrium relationships that persist over time, reinforcing the interconnected nature of these variables. The implications of our study are far-reaching. Policymakers can leverage our insights to design strategies that enhance insurance uptake and contribute to individual financial security and economic stability. Insurance providers can tailor their offerings to accommodate diverse income segments, while researchers can build on our findings to advance the understanding of consumer behavior and preferences in the context of insurance investment. In conclusion, this study provides valuable insights into the drivers of insurance patronage in African economies. By unraveling the intricate web of factors that influence insurance participation, our research contributes to the broader discourse on financial inclusion, risk management, and economic resilience in the region.
