Reviving economic recession and the role of insurance companies in Nigeria

Abstract

The persistent occurrence of poor economic condition and economic recession has put the policy makers on the possible and appropriate approaches to tackle the economic problem. Despite the efforts expended both empirically and theoretically to curb the menace, the economy is still vulnerable to macroeconomics shocks. Therefore, this study investigated the role of insurance companies on revival of reviving economic recession in Nigeria. The study covers the period of 25 years from 1996 to 2020 and data were gathered from CBN statistical bulletin, 2020 edition. Data on economic recession was represented with dummy variable such that “0” represents the period of positive economic growth rate while “1” represents the period of negative growth rate. Data on insurance investment, insurance asset, number of insurance companies and insurance contribution to GDP were considered to measure insurance performance. The model was specified with Ordinary Least Square and multiple regression methods. It was shown that insurance asset, insurance investment and insurance performance were found to statistically significant while numbers of insurance companies were found to statistically insignificant. The result revealed that insurance asset is not capable of reducing economic recession during the period under review but insurance investment, insurance performance and numbers of insurance companies have proven to be sufficient tools to reduce economic recession. Based on these findings, the study concluded that insurance companies played a significant role in reviving poor economic condition. The study recommended that adequate attention should be given to insurance companies in order to fulfill their full potential.