ABSTRACT

The study examined the effect of insurance sector development on the growth of the Nigerian economy for the period 1985 to 2022 (38 years). The Autoregressive Distributed Lags (ARDL) technique was employed in the analysis of data based on four insurance sector development related variables, such as insurance premium (INPR), insurance investment rate (INIVR), insurance assets (INASS) and insurance penetration (INPEN). These were regressed against real gross domestic product (RGDP) (proxied for economic growth). The results from the empirical analysis indicated that insurance penetration (INPEN) has a weak positive relationship with economic growth in the long run; insurance premium (INPR) has a significant negative impact on the growth of the Nigerian economy; insurance assets (INASS) failed the 5 percent level of significance, suggesting that it does have significant impact on the growth of the Nigerian economy; insurance investment rate (INIVR) has an insignificant negative relationship with economic growth in Nigeria; while the previous values of RGDP, INPEN, INPR, INASS and INIVR significantly impact economic growth in Nigerian in the long run than their current values. The study recommends among others that since insurance premium (INPR) has significant negative impact on economic growth, it therefore follows that the insurance firms in Nigeria should ensure the implementation of appropriate premium rate that will not only attract more clients but will also boost overall income to the firms thereby contribute meaningfully to the growth of the Nigerian economy.