Insurance And Entrepreneurship: A Conceptual Framework

Abstract

Historical and literature reviews as well as considerations on the issue of risk aversion and entrepreneurship show that insurance can reduce uncertainty, protect assets, and ultimately support entrepreneurship and economic activity.  Insurance and the various policies have their unified characteristic as a business that has the institutional role of supporting other business activities. Thus the development of insurance is commingled with other economic activities and initiatives and with economic growth. However, the conditions for insurance in emerging markets—and in particular in Latin America and the Caribbean—are not primarily conducive to economic activity and entrepreneurship. There are numerous reasons for this, including institutional shortcomings and insurance premiums that do not reflect fair prices.The research refers at various areas, e.g., economic growth, financial market, insurance markets, entrepreneurship. The literature explored and provided answers of different links e.g., financial markets and economic growth; financial markets and entrepreneurship; entrepreneurship and economic growth. In fact, financial market development is considered an important determinant of economic growth and for entrepreneurship; entrepreneurship and economic growth are closely related in the sense that entrepreneurship prompts economic growth. However, the links between insurance and entrepreneurship and the contribution of insurance to economic activity and growth, and particularly how insurance supports entrepreneurship still need to be qualified and empirically proved.