On the asymmetric effects of insurance sector development on environmental quality: challenges and policy options for BRICS economies

This study contributes to the empirical literature by analyzing the dynamic impacts of insurance sector development on CO₂ emissions of emerging economies for the period of 1991-2018. By using the nonlinear autoregressive distributed lag (NARDL) approach, our findings show that increased life insurance sector development significantly reduces CO₂ emissions of Russia, China and South Africa and decreased life insurance sector development significantly enhances CO₂ emissions of Russia only. While China and South Africa have also reduced CO₂ emissions due to the negative shock of life insurance sector development in the long run. Findings also show that increased non-life insurance sector development boosts CO₂ emissions in Russia and China, while negatively significant in case of South Africa. Moreover, decreased non-life insurance sector development reduces CO₂ emissions in Russia, India and China and positively significant in case of South Africa in long run. The short-run outcomes are also country-specific in our analysis. Finally, we provide some helpful suggestions for investors, and consumers and policy-makers.