Life Insurance Market Development and Economic Growth in Cameroon:
Evidence of a Nonlinear and Feedback Relationship

This study examines the impact of life insurance market development on economic growth in
Cameroon, the second-largest market in the FANAF zone in terms of premiums issued in 2021.
Despite the notable growth of the Cameroonian life insurance sector, its potential impact on
economic growth remains largely unexplored, as national empirical research has primarily focused
on banking institutions. This study addresses a significant empirical and methodological gap in the
existing literature by investigating two fundamental questions: the direction of causality between
life insurance development and economic growth (supply-leading, demand-following, or feedback
hypothesis), and whether this relationship is symmetric or asymmetric. Using annual data covering
the period from 1992 to 2020 and advanced econometric methods (ARDL, NARDL, FMOLS,
DOLS, and CCR), we establish the existence of a positive and significant long-run relationship
between life insurance penetration and GDP per capita. Our results reveal an intrinsic asymmetry:
the expansion of the life insurance market generates a greater positive impact on economic growth
compared to contraction periods. The Granger causality test, adapted to asymmetric modeling,
confirms the existence of a feedback relationship: economic growth initially stimulates sector
development, which in turn influences growth asymmetrically. These findings underscore the need
for proactive regulation and targeted awareness policies to maximize the stabilizing role and
catalytic effect of life insurance in the Cameroonian economy.