Impact of Insurance Sector Development on the Growth of the Nigerian Economy

Abstract

The study examined the role of insurance sector development in the growth of the Nigerian economy for the period 1985 to 2022 (38 years). The Autoregressive Distributed Lags (ARDL) technique was employed in the analysis of data, and the results from the empirical analysis indicate that insurance penetration (INPEN) has a weak positive relationship with economic growth in the long run; insurance premium (INPR) has a significant negative impact on the growth of the Nigerian economy; insurance assets (INASS) failed the 5% level, suggesting that it does have significant impact on the growth of the Nigerian economy; insurance investment rate (INIVR) has a weak negative relationship with economic growth in Nigeria; while the previous values of RGDP, INPEN, INPR, INASS and INIVR significantly impact economic growth in Nigerian in the long run than their current values. The study recommends among others that since insurance premium (INPR) is significant and inversely related economic growth, it therefore follows that the insurance firms in Nigeria should ensure the implementation of appropriate premium rate that will not only attract more clients but will also boost overall income to the firms thereby contribute meaningfully to economic growth in Nigeria.

Keywords: Economic Growth, Insurance Sector Development, Insurance Premium, Insurance Penetration, Econometric and Statistical Methods