DOES INSURANCE PENETRATION PROMOTE ECONOMIC GROWTH? EVIDENCE FROM NIGERIA
Omoruyi Aigbovo and Emeka Henry Iroh
Volume 1 Issue 1
Abstract
Quest to find out whether insurance penetration rate promotes economic growth in Nigeria is the rationale behind this research. This study examines the short-run and long-run effect of insurance penetration rate on economic growth in Nigeria for the period 1980-2020. Descriptive statistics, correlation analysis, unit root tests, cointegration, error correction model, ordinary least squares and granger causality test were used in the analysis and the data were estimated with the aid of E-views 9.0 econometric statistical package. The findings revealed that insurance penetration rate exerts significant positive impact on economic growth in Nigeria in both short-run and long-run. Also, no causal link was found between insurance penetration rate and economic growth. The study therefore recommends that the ongoing reforms in the insurance sector should be deepened in order to improve the development of the insurance sector and by that increase their role in promoting economic growth. Also the regulation and supervision of the insurance sector should be strengthened as it plays a great role in determining both its stability and the extent of the services provided. Keywords: Insurance Sector, Insurance Penetration Rate, Insurance Premium, Error Correction Model, Granger Causality Test
Download Paper