GLOBALIZATION AND INSURANCE PROFITABILITY IN SUB-SAHARAN AFRICA

ABSTRACT

This study explores the intricate relationship between globalization and insurance profitability in the dynamic markets of sub-Saharan Africa. The study employed a multifaceted methodology, encompassing descriptive statistics, panel unit root tests, co-integration analysis, and the Error Correction Model (ECM), to thoroughly investigate the impact of globalization factors on the profitability of insurance companies operating in the region with a meticulous examination of a dataset comprising data from 10 insurance firms actively participating in sub-Saharan Africa. The study findings reveal significant relationship between key globalization variables (Global Claim Rate, Global Inflation Rate, Global Interest Rate, and Global Exchange Rate) and insurance profitability. The study highlights the presence of long-term equilibrium relationships and the system's responsiveness to deviations from equilibrium. These insights provide valuable guidance for policymakers and industry stakeholders, enabling them to navigate the evolving landscape of insurance profitability in the region.