FOREIGN INVESTMENTS AND FINANCIAL GROWTH OF COMPANIES IN INSURANCE SECTOR OF NIGERIA

ABSTRACT

This study examines foreign investment and financial growth of insurance sector in Nigeria. The study adopts the ordinary least squares (OLS) econometric technique to analyse the empirical model and examine the effect of foreign investment on the financial growth of insurance firms in Nigeria. The result shows that the current value and one period lag of FPI have a negative and insignificant impact on IPR, whereas the second, third, and fourth period lags of FPI have a positive and significant impact on IPR. Foreign direct investment (FDI) has a positive and significant effect on insurance penetration when it is measured at the current value, but a negative and significant effect when measured at the one, two, or three period lags. Remittances current values shows a negative but significant impact on insurance penetration rate in Nigeria. Remittances one lag period is negatively related to insurance penetration rate in Nigeria and statistically significant while the second and third period lag are positively related but not statistically significant. The study recommends that the Nigerian insurance industry may increase its market share by adopting a strategy that would entice international investors to purchase portfolios in the country. Insurance sector performance would improve as a result of increased foreign investment in Nigeria, which in turn will boost economic growth, job creation, investment, national revenue, and price stability.