LONG-RUN RELATIONSHIP BETWEEN INSURANCE INDEX AND ECONOMIC FACTORS

Abstract

The objective of this study is to study long-run equilibrium relationship between insurance index and economic factors by applying an ARDL (Autoregressive Distributed Lag) model. The results found long-run equilibrium relationship between insurance index, domestic passenger car sales, exchange rates (reference rate: USD), time deposits rate (weighted average), SET index, consumer price index, manufacturing production index, insured persons, labour cost index and gross domestic product.

The results indicate that time deposits rate (weighted average), gross domestic product and labour cost index are not significantly related to insurance index in the long-run. The other factors are significant, where exchange rates (reference rate: USD), SET index, consumer price index and manufacturing production index have positively related to insurance index in the long-run at 5% confidence level; while domestic passenger car sales and insured persons have negatively related to insurance index in the long-run at 10% confidence level.