The Role of Digital Technology in the Future of Insurance and Economic Development

Abstract

Purpose: The objective of this study is to examine the influence of the Digital Adoption Index (DAI), Insurance and Financial Services' percentage contribution to GDP, ICT Expenditure as a percentage of GDP, the Ease of Doing Business Index, and Gross National Income per capita on economic development in developing countries.   Theoretical Framework: Drawing from the endogenous growth theory, the study hypothesizes that improvements in digital technology, insurance and financial services, and the business environment, alongside the level of national income, contribute positively to economic growth.   Methodology: A panel regression analysis was applied using the Fixed Effects model to analyze data collected from various developing countries. The study utilized both unit root and cointegration tests, with the Hausman test used for model selection.   Findings: The results demonstrated that all variables significantly influence GDP per capita. The most substantial impacts were found to come from the Insurance and Financial Services' percentage of GDP and the GNI per capita.   Research, Practical & Social implications: The findings underline the crucial role of digital technology, insurance and financial services, ICT expenditure, ease of doing business, and GNI per capita in enhancing economic growth. They provide insights for policy-makers in developing countries on the areas to prioritize for substantial economic development.   Originality/Value: This study fills a research gap in exploring the interplay of digital technology, insurance, and economic growth, particularly in the context of developing countries. It provides a unique contribution by integrating various factors into a comprehensive model.