Nexus between insurance penetration and economic growth: Evidence from Nigeria

Abstract

The study examined the connection or nexus between insurance penetration and economic growth in Nigeria. Ex-post facto research design is adopted for the study. Secondary data were sourced from Central Bank of Nigeria (CBN) Statistical Bulletin, National Insurance Statistics and Directory, National Bureau of Statistics, World Bank database, Nigeria Insurance Digest, and CIA World Fact Book, for the period of fourteen years (2004 - 2017). Data analysis was undertaken using Ordinary Least Square (OLS) method. The findings of the study suggested that insurance (life and non-life) penetration and claims settlement impact on economic growth in Nigeria during the period considered (2004 - 2017); and insurance (life and non-life) penetration impact positively on the economic growth in Nigeria during the period. The results revealed that non-life insurance penetration and insurance density had a negative impact on economic growth in Nigeria. Nonetheless, life insurance penetration and claims settlement had no significant impacts on economic growth in Nigeria. The study findings suggested amongst others that intense effort is essential to entrench the knowledge and importance of insurance to promote economic growth and growth of the insurance industry through local media, social media, development of new products to meet the insuring public needs, and improved customer service strategy.