IMPACT OF INSURANCE SECTOR ON ECONOMIC GROWTH IN NIGERIA
Abdullahi Abubakar Owuna, Eggon Ahmed Henry, Ph.D and Osekweyi Joel Odonye, Ph.D
Volume 4 Issue 2
Abstract
The study examined the Impact of insurance sector on economic growth in Nigeria for the period of 1990-2023. The study utilizes secondary sources of data extracted from the central bank of Nigeria annual statistics bulletin, and world development indicator (WDI) database 2023. The study undertakes unit root test employing augmented Dickey-Fuller method to determine whether the variables are stationary or not and the result shows that the variables are all stationary. The study employed co-integration test and the results shows that there is evidence of long run relationship among variables; the study employed the vector autoregression (VAR) model for estimation. The findings showed that life insurance premium (LIP) has positive and statistically significant impact on gross domestic product in Nigeria during the period under study; similarly, the findings showed that non-life insurance premium (NIP) has positive and statistically insignificant impact on gross domestic product in Nigeria during the period under review. Similarly, the findings showed that insurance penetration rate (IPR) has positive and statistically insignificant impact on gross domestic product in Nigeria during the period under review. Similarly, the findings showed that insurance claim settlement (ICS) has positive and statistically insignificant impact on gross domestic product in Nigeria during the period under review Therefore; the study found that insurance sector generally has positive impact on gross domestic product in Nigeria during the period of the study. The study recommends that government should encourage and emphasize long-term planning since life insurance encourages individuals and businesses to think long-term plan. By promoting life insurance policies that focus on savings, retirement, and education, the government should contribute to sustainable economic growth by fostering a culture of financial responsibility and stability. Enhancing financial literacy programs can help educate the population about the importance of life insurance and its benefits. This will increase awareness and understanding, leading to higher demand for life insurance policies and subsequently higher premiums. The study further recommends that government increases awareness about the importance of life and non-life insurance in enhancing financial stability and mitigating risk. Keywords: Insurance, Life Insurance Premium, Non-life Insurance Premium, Insurance Penetration rate, Insurance Claim Settlement, Economic growth
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