Author(s): Jumah Ahmad Alzyadat, Bushra Saleh Alwahibi
This study is a practical attempt to highlight the role of insurance activities in economic prosperity in Saudi Arabia. The study used the Autoregressive Distributed Lag (ARDL) to analyze the data. The results find that the growth of insurance activities has a negative impact on economic prosperity in the short run, but turns into positive in the long run. The most important result is that the growth of insurance activities does not play a significant role in the economic prosperity in the short run. Instead, insurance products are considered as a productive factor in the long run, therefore the insurance products in KSA is a supply leading in the long run. The study recommends increasing the contribution of the insurance products in the GDP in Saudi Arabia and considering insurance as a form of effective protection for companies, individuals and the economy. Besides encouraging saving and investment in order to achieve economic prosperity.