ABSTRACT
This study investigated the effect of insurance sector development and economic
development in Nigeria for the period 1986 to 2022. The error correction model (ECM)
was employed for the analysis of data and the findings obtained, indicated that a positive
relationship exists between the two variables validating the hypothesis of the existence of a
significant linear relationship between explanatory variables and economic development in
- However in the long run the coefficients of number of insurance companies,
insurance investment, insurance penetration and total insurance premium are positively
related to economic development and individually significantly at the 5 percent conventional
level. Thus, number of insurance companies, insurance investments, insurance penetration
and total insurance premium are long run-determinants of economic development in Nigeria
in the long run. Apparently, these variables influence the level of human capital
Development in Nigeria in the long run. The study concludes that the development of the insurance sector plays a major role in economic development of Nigeria. All the insurance sector development indicators are positively and significantly related to economic development. Thus, there is a strong, positive link between insurance sector development and economic development in Nigeria.The study recommends among others that. Strategies of introducing new insurance products with attractive and flexible features should be adopted by regulatory authorities like NAICOM and CBN. This will increase total insurance premium and deepen insurance penetration which are important stimulants of economic development.
