Non-Life Insurance Sector Premiums and Economic Growth: The Nigerian Experience

Abstract

The study examined the relationship amid Non-life insurance premiums and economic growth in Nigeria for the period 1981–2017. The study measured fire premium, Accident premiums, Motor vehicle premium, Marine premiums and miscellaneous premiums as proxies for Insurance sector premiums while Real Gross Domestic Products was used as proxy for Economic growth for the said periods under review. In the course of the study, data were obtained from the website of Central Bank Statistical bulletin and annual report of NIA digest. The Phillips Perron type was used to test for unit root. The Autoregressive distributed lag (ARDL) and Bounds test was used to estimate the short and long run relationships. This study found a positive relationship at some lag periods amid the independent variables and the dependent variable. However, the relationships were not significant both at the short run and long run. Insurance firms should leverage on fire and accident insurance policies to boost high premiums. Adequate public awareness and education should be carried out by insurance firms to enable members of the public to enter into insurance contract. Strong legal framework should be introduced to protect the insured to claim indemnity at the event of litigation arising from insurance contract disputes. Government should make legislations that would encourage individuals and business organizations to hold insurance policies with the aim of pooling insurance premiums for economic growth.