International Journal of Business and Finance Management Research
ISSN: 2053-1842
Vol. 6(3), pp. 22-33, December 2018
doi.org/10.33500/ijbfmr.2018.06.003

Effect of insurance industry performance on economic growth in Nigeria

Baba Yaro Iyodo¹, Sunday Eneojo Samuel²* and Sunday Joseph Inyada³

¹Department of Banking and Finance, Faculty of Management Sciences, University of Jos, Nigeria.
²Dundee Business School, Abertay University, United Kingdom, DD1 1HG.
³Department of Accounting, Faculty of Management Sciences, Kogi State University, Anyigba, Kogi State, Nigeria.

*To whom correspondence should be addressed. E-mail: aglowsam@gmail.com.

Received 17 October, 2018; Received in revised form 19 November, 2018; Accepted 27 November, 2018.

Keywords:
Insurance, Economic growth, Insurance performance, Regression analysis.

This study explored the effect of insurance industry performance on economic growth in Nigeria. Insurance is a cover from financial loss. The study sought out to examine the impact of non-life insurance penetration on the economic growth of Nigeria. The ex-post facto study design was adopted for this study. Time series data for the period 1988-2014 were collated from the Central Bank of Nigeria (CBN) Statistical bulletin. Data were analysed using regression. The ARDL bound test was adopted in the testing of hypotheses formulated for the study. The findings of the study revealed that non-life insurance penetration had a positive and substantial effect on the economic growth in Nigeria during the period. The study recommends among others that life insurance companies come up with life products mainly designed for the low-paid earners as the target which will enhance penetration and deepen the market, more awareness is created to improve the participation of product industry and firms as this will intensify the activities of the insurance industry in Nigeria. Furthermore, it is recommended that an increased diversification of insurance products mostly in non-life businesses be embanked upon. For insurance industry in Nigeria to exert a significant and positive influence on the Nigeria economy, government insurance policies covering compulsory insurance for all Nigerian, mainly non-life and, health insurance cover should be strictly enforced and implemented.

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