摘要：The insurance firms as financial intermediaries play a significant role within a nation’s financial system by mobilizing funds from the surplus economic unit and channeling it to the deficit investment unit of the economy.Life insurance business as an aspect plays a crucial role in supporting investments by accommodating all life insurable risks and financial consequences.Considering this crucial role,the study investigates the factors that influence life insurance market from Ethiopian perspective.It employs secondary data on eleven independent variables – six of which are economic and five demographic variables for a period of 28 years from 1979/1980 to 2007/2008.The error correction mechanism (ECM),the Johansen cointegration test and the Augmented Dickey-Fuller test were utilized in its econometric analysis.The result shows a long-term balanced connection amongst the variables.Inflation had a statistically noticeable negative impact on the demand and supply in the life insurance market.In addition,there was a statistically significant negative effect of young dependency ratio on life insurance market demand while old dependency ratio had a statistically significant positive relation to life insurance supply.Based on the results,it is recommended that during high inflation,life insurance companies should revise price decisions to enhance the life insurance market.To minimize the inverse effect of young dependants,insurers need extensive sensitization on the young age through their families and promote products that suit the young children – such as children’s education policies.With the increase in life expectancy of individuals and groups,which results in an increase of the life insurance market,insurers have to develop products that can make provision for such societal dynamic.
关键词：The insurance firms as financial intermediaries play a significant role within a nation’s financial system by mobilizing funds from the surplus economic unit and channeling it to the deficit investment unit of the economy.Life insurance business as an aspect plays a crucial role in supporting investments by accommodating all life insurable risks and financial consequences.Considering this crucial role,the study investigates the factors that influence life insurance market from Ethiopian perspective.It employs secondary data on eleven independent variables – six of which are economic and five demographic variables for a period of 28 years from 1979/1980 to 2007/2008.The error correction mechanism (ECM),the Johansen cointegration test and the Augmented Dickey-Fuller test were utilized in its econometric analysis.The result shows a long-term balanced connection amongst the variables.Inflation had a statistically noticeable negative impact on the demand and supply in the life insurance market.In addition,there was a statistically significant negative effect of young dependency ratio on life insurance market demand while old dependency ratio had a statistically significant positive relation to life insurance supply.Based on the results,it is recommended that during high inflation,life insurance companies should revise price decisions to enhance the life insurance market.To minimize the inverse effect of young dependants,insurers need extensive sensitization on the young age through their families and promote products that suit the young children – such as children’s education policies.With the increase in life expectancy of individuals and groups,which results in an increase of the life insurance market,insurers have to develop products that can make provision for such societal dynamic.
