AUTHOR: Amarbayasgalan Myagmar-Ochir, Burmaa Galaa, Oyundari Byambaa
PUBLISHED IN: Volume 6 Issue 1
KEYWORDS: Sustainable Development Goals, Insurance Penetration, Sustainable Finance, Climate Risk, Financial Resilience
ABSTRACT
Accelerating climate change has intensified economic losses from natural disasters and heightened the demand for effective financial risk-management mechanisms worldwide. In this context, the insurance industry has emerged as a critical component of sustainable development by enhancing financial resilience, supporting social protection systems, and facilitating climate adaptation. This study empirically examines the relationship between insurance industry development and progress toward the Sustainable Development Goals (SDGs) using cross-country data from 155 countries. Insurance penetration, measured as the ratio of total insurance premiums to gross domestic product, is employed as a proxy for insurance industry depth, while sustainable development performance is captured using the SDG Index. A log–log regression framework is applied to assess the magnitude and statistical significance of the association between insurance penetration and SDG outcomes. The results reveal a positive and highly significant relationship, indicating that higher insurance penetration is associated with improved SDG performance across countries The model explains 34.1% of the cross-country variation in SDG Index scores (R² = 0.341), indicating a substantial association between insurance penetration and sustainable development outcomes. To further explore potential nonlinearities, an Artificial Neural Network model is applied, identifying a threshold level of insurance penetration below which SDG performance remains constrained. These findings highlight insurance development as an important policy instrument for advancing the SDGs, particularly in climate-vulnerable and emerging economies where insurance markets remain underdeveloped such as Mongolia.
DOI: https://doi.org/10.65194/IJBI-2026-1002
