The demand for insurance is affected by the effective demand in the macro economy, on the one hand. On the other hand, insurance has an impact on the changes in the effective demand in the macro economy. There thus exists an interactive relationship between insurance and the macro economy. If the insurance system in a country could be steadily developed, the total production for the country would increase in multiples through the effect of insurance on the macro economy as well as the multiplier effect. The growth in the macro economy would bring about an increase in the demand for insurance as a feedback.The findings from this study include: (1)The insurance in Taiwan causes a fast economic growth.(2) The growth of the per capita income in Taiwan furthermore helps develop all areas of the insurance industry, which raises the per capita income as a feedback.