Estimation of Life Insurance Capacity in Iran A Panel ARDL Approach

Life insurance is one of the most important economic instruments. Considering the important role of life insurance, this study investigates the life insurance capability in Iran. For this purpose, the Panel ARDL model has been used. Then, for the period 1990-2016, suitable models for the first group (Iran with the leading countries in the industry), the second group (Iran with the countries that were close to Iran in premiums) and the group Third (countries in two groups) were estimated. Based on models, the fitted value of life insurance premiums per capita in Iran is analyzed and compared as the potential or optimal level in each groups. The results showed that in each group, the actual life insurance premiums per capita in Iran are significantly lower than the optimal level. The capacity level of life insurance in Iran compared with first group is 46%, and compared with second group is about 42% and compared with third group is about 44%. The results indicate that Life insurance in our country has a high potential, and a large part of the insurance capacity in our country has not yet been fully acquired.