Impact of Non-life Insurance Penetration on the Economic Growth of Nigeria

Abstract

This study explores the impact of non-life insurance industry performance on economic growth in Nigeria. Insurance penetration is measured through five diverse proxies such as non-life insurance, savings, expenditures, investment and profits of the insurance industry with their time-series statistics covering the period 1988 and 2012. The ex-post facto research strategy and purposive (judgemental) sampling technique were discovered appropriate for the study as effectively utilised by several intellectuals in the past. Data were analysed using regression. The ordinary least square regression was adopted for the testing of the hypotheses. The outcomes of the study showed that non-life insurance penetration had a substantially positive effect on the economic growth in Nigeria during the period. Profit and investment are found to have a positive effect on the economy but statistically insignificant while Savings and government expenditure have an adverse effect on the economy. The study recommends an improved modification in insurance products, especially in non-life businesses to availing clients the chance of choosing from a diversity of products. The study, therefore, recommends an increase in the awareness of non-life insurance services for its impact to be felt at all levels and to encourage participation.

Keywords: Non-life insurance, Economic growth, Insurance penetration, Nigeria

DOI: 10.7176/RJFA/11-2-05

Publication date: January 31^st 2020