Insurance and Economic Growth: The Case of Iran's Economy

This paper examines the role of insurance industry in the economic growth of Iran, by using a hypothetical extraction method (HEM). To estimate the causality relationship(Toda and Yamoto Test), the time series analysis for (1967-2007) period Input-Output tables of 1986 and 2001 are used. The results show the existence of a one way relationship from insurance to economic growth, but only for non-life insurance. However, no relationship is observed for life insurance. This finding indicates the insignificant role of insurance sector in Iran’s economic growth.