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ABSTRACT
The study examines the effects of inflation rate and interest rate on insurance penetration rate in Nigeria. While several empirical studies have been done on this topic, few of the previous studies have focused on Nigeria. The specific objectives of the study were to ascertain the effect of inflation rate on insurance penetration and to determine the effect of interest rate on insurance penetration in Nigeria. Secondary data were extracted from the Central Bank of Nigeria Statistical Bulletin. The study adopted a multivariate OLS analysis for the estimation process and the data were regressed and analysed with the aid of EVIEWS 9.0 econometric software package. The findings of the study were that interest rate and economic growth positively impacts insurance penetration in Nigeria while inflation was found not to be a key factor that influences insurance penetration in Nigeria over the period. We therefore recommend that monetary policy should be structured and designed to stimulate a positive effect on insurance penetration in Nigeria. Furthermore, management of insurance firms in the selected Sub-Saharan African countries should pay less attention to inflation since it play no key role in insurance penetration in Nigeria. Also, economic growth as a control variable has played a critical role in insurance penetration, we recommend that insurance companies should evolve means of expanding output and outreach while also increasing efficiency. This can be done by increasing the depth of the insurance market since the there is room for expansion with growth in the economy.
