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.