Abstract:
This study investigated the effect of insurance industry performance on economic growth in Nigeria. Insurance is a protection from financial loss. The problem was that, there has been a paucity of local literature and studies on the performance of the insurance industry on economic growth in Nigeria. The specific objectives of the study were; to examine the effect of non- life insurance penetration on economic growth in Nigeria, assess the effect of life insurance penetration on the economic growth in Nigeria, evaluate the effect of insurance density on the growth of Nigerian economy and investigate the effect of insurance industry’s expenditure on economic growth in Nigeria. The study adopted the ex-post facto research design. Time series data for the period 1988-2014 were collated from the Central Bank of Nigerian Statistical bulletin. Data were analyzed using regression. The ordinary least square regression was adopted for testing the four hypotheses formulated. The results of the study revealed that life insurance penetration exerted a negative but significant effect on the economic growth in Nigeria, Non-life insurance penetration had positive and significant effect on the economic growth in Nigeria during the period; Insurance den oance expenditure had positive but non significant effect on the economic growth in Nigeria within the period of this study. The study recommends among others that life insurance companies should come up with life products mainly designed for the low income earners as the target which will enhance penetration and deepen the market. More awareness should be created to enhance the participation of products industry and firms as this will deepen the activities of insurance industry in Nigeria. Furthermore, this study recommends an increased diversification of insurance products especially in the non-life businesses. This has to be done for insurance industry in Nigeria to exert most significant positive impact on the Nigerian economy. Again government insurance policies covering compulsory insurance for all Nigerians, particularly life and health insurance cover should be strictly enforced and implemented.
