Insurance, Environment, and Growth: A Panel Study Across European Countries

This study examines the impact of insurance market development on Carbon dioxide (CO2) emissions and economic growth in the European Union (EU-15) and Central and Eastern European (CEE-11) countries over the period 1996–2022. Long-run relationships are analysed using panel cointegration tests and Mean Group (MG), Pooled Mean Group (PMG), and Dynamic Fixed Effects (DFE) estimators. At the same time, causal links are assessed through the Granger non-causality test. Results show that in EU-15 countries, insurance development positively affects both environmental quality via reduced CO2 emissions (elasticities between 0.2078 and 0.2860), and economic growth (0.109–0.829). In CEE-11 countries, a positive effect on growth (0.102–0.205) is confirmed, but no significant environmental impact is observed. The findings highlight the need for policies that support green insurance initiatives and investments in low-carbon transition projects, especially in the CEE-11 region.