Interaction between insurance, reinsurance and financial sustainability in the popular and solidarity-based financial system: empirical evidence in emerging economies

Abstract

This study examined the relationship between insurance, reinsurance, and financial sustainability in the popular and solidarity-based financial systems of emerging economies, aiming to understand how these instruments contributed to institutional stability and strengthened financial inclusion. The analysis was based on the premise that insurance, particularly microinsurance, played a significant role in reducing users' exposure to frequent economic risks, providing protection to low-income sectors. Complementarily, reinsurance was observed to act as a key mechanism for insurers, facilitating risk transfer and reducing the likelihood of significant losses, thus strengthening their financial and operational resilience. Using a quantitative approach, variables such as insurance coverage, reinsurance utilization, and various financial indicators, including profitability and liquidity, were analyzed. The findings indicated that effective integration of both instruments had a positive impact on the sustainability of entities within the sector, while also promoting greater expansion of financial services to traditionally excluded populations. In this sense, it was determined that the integration of insurance and reinsurance not only optimized risk management, but also contributed to strengthening the popular and solidarity-based financial system as a whole.