Does one need life experience to be a good writer?
Well, what else might you draw from? Yes, most people do tend to lead average lives, which doesn’t make for especially interesting stories. And so the question is: how can imagination be improved?
In my own experience, I would have to say imagination is the ability of a person to synthesize pieces of supposedly unrelated data, an ability that deepens with greater life experience.
For example, while studying eddying currents for a painting, Leonardo da Vinci was struck with the thought that the circular whorls could perhaps be used to make an effective pump, then sketched out a diagram of the human heart with similar eddies. Internal medical imaging proved him right.
His imagination allowed him to form a relation between the movement of liquid in a steambed and in the human body, but this act of connection could only have arrived to someone who had enough experience with anatomy and fluid dynamics.
Imagination doesn’t necessarily mean fantastical scenarios. Some of the most remarkable authors showed the ability to present small, natural moments in remarkably interesting and surprising ways. And ‘life experience’ doesn’t need to mean traveling the world. It can be a series of small, varied experiences amongst different kinds of people, which is how Chekhov came to be inspired to compose his stories during soirees at his house.