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ABSTRACT
The insurance sector's growth and development heavily depend on its relationship with the capital market. Insurance companies rely on the capital market to invest their premium income, which generates returns. These returns bolster financial stability and allow them to issue new insurance policies. To this end, this study seeks to examine the relationship between the performance of the stock market and the growth of the insurance sector in Nigeria, covering the period from 1995 to 2023. Variables such as; market capitalization, all share index, total value of transactions, total volume traded, and market turnover was employed to investigate the impact of the Nigerian Capital Market on the growth of the insurance sector in Nigeria, as measured by insurance penetration rate. This research utilized the fully modified ordinary least squares (FMOLS) econometric method to examine the empirical model and determine the influence of stock market performance on the growth of Nigeria's insurance sector. A causal, ex post facto design, employing OLS regression for data analysis will be utilized to this effect The findings of the study revealed that there exists a strong correlation between capital market indicators and insurance sector growth, with the exception of the stock index point variable. Therefore, recommending that in order to enhance the sector's contribution to capital market growth, it was necessary for insurance firms to increase their presence on the stock exchange market as this would allow them to participate more actively in capital market activities, leading to greater market capitalization and improved other growth indicators.
