Information Asymmetry and Insurance in Africa

Journal of African Business, 22(3), pp. 394-410.

24 Pages Posted: 7 Oct 2020 Last revised: 23 Jul 2021

See all articles by Simplice Asongu

Simplice Asongu

African Governance and Development Institute

Nicholas Odhiambo

University of South Africa - Department of Economics

Date Written: August 1, 2020

Abstract

In this study, we assess the relevance of decreasing information asymmetry on life and non-life insurance consumption, by using data from 48 African countries during the period 2004-2014. Reduced information asymmetry is proxied by information sharing offices, namely: public credit registries and private credit bureaus. The empirical evidence is based on the Generalised Method of Moments. The findings show that information sharing offices increase insurance consumption with a comparatively higher magnitude in life insurance penetration, relative to non-life insurance penetration. Practical and theoretical implications are discussed.

Keywords: Insurance; Information Asymmetry

JEL Classification: I30; G20; G22; O16; O55

Suggested Citation

Asongu, Simplice and Odhiambo, Nicholas, Information Asymmetry and Insurance in Africa (August 1, 2020). Journal of African Business, 22(3), pp. 394-410., Available at SSRN: https://ssrn.com/abstract=3665428 or http://dx.doi.org/10.2139/ssrn.3665428

Simplice Asongu (Contact Author)

African Governance and Development Institute ( email )

P.O. Box 8413
Yaoundé, 8413
Cameroon

Nicholas Odhiambo

University of South Africa - Department of Economics ( email )

PO Box 392
Pretoria, 0003
South Africa

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