AN EQUILIBRIUM RELATIONSHIP BETWEEN INSURANCE INDUSTRY AND ECONOMIC GROWTH IN NIGERIA: A CO-INTRGRATION MODELLING (1993-2023)

Abstract

This work examined an equilibrium relationship between insurance industry and Economic Growth in Nigeria between the period 1993 to 2023. The study was prompted as a result of Nigerian’s negative attitude towards insurance industry, as they argued that the industry has not contributed to economic growth. Based on this, the study is set to empirically investigate the effect of insurance industry on the Nigerian Economic Growth. The dependent variable used was Real Gross Domestic Products, a proxy for Nigerian Economic Growth, while the explanatory variables were insurance output, total investment of insurance business, gross premium income of insurance industry and inflation rate. The Data used, were basically through CBN Statistical Bulletin and the Ordinary Least Square technique was used to test the validity of the hypotheses stated. The research revealed that insurance industry through her routine activities has contributed significantly to Economic Growth of Nigeria as result revealed, all the explanatory variables to be simultaneously significant to Nigerian Economy. Thus, proving that, there exists, an equilibrium relationship between the growth of Nigerian economy and the Insurance industry. Also from individual test, total insurance of investment and total income of insurance were statistically significant to Nigerian Economic Growth. Though insurance output and inflation rate were insignificant which resulted from low patronage due to lack of trust and therefore, recommends that an increased supervisory role of NAICOM (National Insurance Commission), prompt payment of premiums, effective utilisation of insurance funds, research, improved public awareness through adverts and campaigns are possible solutions to the challenges facing the industry.