Insurance Sector Development and Economic Growth: Empirical Analysis from Nigeria
Sunday Oseiweh Ogbeide *
Department of Accounting and Finance, Faculty of Humanities, Social and Management Sciences, Elizade University, Ilara- Mokin, Ondo State, Nigeria.
Timothy Olufemi Adu
Department of Accounting and Finance, Faculty of Humanities, Social and Management Sciences, Elizade University, Ilara- Mokin, Ondo State, Nigeria.
Florence Modupe Fapohunda
Department of Accounting and Finance, Faculty of Humanities, Social and Management Sciences, Elizade University, Ilara- Mokin, Ondo State, Nigeria.
James Obadeyi
Department of Accounting and Finance, Faculty of Humanities, Social and Management Sciences, Elizade University, Ilara- Mokin, Ondo State, Nigeria.
*Author to whom correspondence should be addressed.
Abstract
This study evaluated the relationship of insurance sector development with the growth of Nigerian economy between 2003 and 2020. The study analyzed the time series data by employing the Autoregressive Distributed Lag Model. Thus, findings indicated that insurance sector productivity was a statistically significant determinant of economic growth with coefficient 0.8092 (p-value = 0.0250<0.05); hence, the study revealed that Nigerian economic growth was strongly and positively promoted by the productivity of the insurance sector. Also, insurance sector claims expenditure was revealed as a weak promoter of economic growth with coefficient 0.0165(p-value = 0.6860>0.05) while insurance sector total asset was indicated as a weak and negative predictor of the Nigerian economy with coefficient -0.0919(p-value = 0.4180<0.05). Accordingly, the study concluded that the development that took place in the insurance sector during the scope of this study significantly promoted growth in the Nigerian economy and consequently recommended that the Nigerian government should consider insurance sector as one of those sectors that are critical to Nigerian economic growth, and should be so treated by according it same attention with banking sector and other critical sectors of the economy.
Keywords: Insurance sector, economic growth, total asset value, insurance sector productivity, total claims expenditure