On the path to sustainable development: insurance, a crutch for the economies of sub-Saharan Africa?

Abstract The analysis of the finance-development nexus is mainly limited to the banking sector and capital markets, and the potential of the insurance sector seems to be ignored in the literature. The aim of this paper is to investigate the other neglected effects of the insurance sector by examining how it affects sustainable development in a sample of 31 sub-Saharan African countries over the period 2000–2022. To achieve this, we mobilized two main parametric methods, namely IV-Tobit and GMM, and a non-parametric method like Quantile Regression. The results revealed that insurance fosters sustainable development. Furthermore, the distinction between life and non-life insurance confirms this result, with a greater effect for non-life insurance. The results remain valid when the type of governance is distinguished, but are mixed when the income level is taken into account. The mediation analysis revealed that international trade and information and communication technologies are transmission mechanisms through which the insurance sector impacts sustainable development. Consequently, political decision-makers should also make use of the insurance sector to seek the financing needed to implement programs that will help achieve the objectives of sustainable development.