Contributory Pension Fund and the Growth of Nigeria's Insurance Industry

Olajide Solomon FADUN; Akeem Bamidele AGBOOLA

Olajide Solomon FADUN Department of Actuarial Science & Insurance, University of Lagos, Akoka Lagos, Nigeria
Akeem Bamidele AGBOOLA Department of Actuarial Science & Insurance, University of Lagos, Akoka Lagos, Nigeria

Keywords: Annuity, Contributory pension fund, Gross Premium Income, Insurance industry, Pension

Abstract

Pension funds perform crucial roles in the various sectors of the economy, including the insurance industry, where they serve as a source of premium income. Thus, the effect of the contributory pension fund on the insurance industry's growth was investigated in this study. Twelve years (2010-2021) data was extracted from PenCom and NAICOM annual reports. The regression analysis’s findings showed that pension fund contribution and annuity premiums significantly impact the gross premium income of Nigeria's insurance industry. Though the findings of this study show that the Nigeria Insurance Industry has grown because of the contributory pension fund, economic experts believe that the contributory pension scheme has yet to maximise its capacity to stimulate the insurance industry's growth. The study recommends that the National Pension Commission (PenCom) and insurance companies educate people on the benefits of choosing the life annuity option for retirement benefits.