Impact of Insurance Deepening on Economic Growth in Nigeria
- March 19, 2019
- Posted by: RSIS
- Category: Banking & Finance
International Journal of Research and Innovation in Social Science (IJRISS) | Volume III, Issue III, March 2019 | ISSN 2454–6186
Impact of Insurance Deepening on Economic Growth in Nigeria
Michael Chukwunaekwu Nwafor
Department of Accounting and Finance, Godfrey Okoye University Enugu, Nigeria
Abstract: – This paper examined the impact of insurance deepening on economic growth in Nigeria. Data spanning from 1990 to 2016 was obtained from CBN Statistical Bulletin, 2016 and NAICOM database. Data was imported into SPSS and analyzed using SPSS version 25.0. Finding revealed that insurance deepening has significant impact on economic growth of Nigeria, this impact was further qualified by the slope which had negative sign, emphasizing that the relationship between insurance deepening and economic growth is inverse.
Keywords: Insurance Deepening; Nigerian Insurance Sector; Economic Growth; GDP
I. INTRODUCTION
Deepening in the Nigerian insurance sector has been a topic of discuss since the reforms in 1997. However, a close examination of the financial sub-sector as seen inthe Nigerian Stock market, reveals that investments in insurance stocks are yet to yield meaningful returns for investors. The Nigerian Insurance sector is burdened with various challenges that currently seem to have no solution unless drastic actions are taken to deepen the insurance culture among Nigerians. Problems of low patronage, minimal value trading in the Nigerian Stock market combined with little or no insurance culture of Nigerians continue to take a toll on the insurance sector, as an analysis on the performance of listed insurance companies in the year 2017 confirmed the difficulties being encountered in the Insurance sector.
The insurance sector is a major part of Nigeria’s economy. According to Saunders & Cornett (2008), insurance plays an important role as it serves a number of valuable economic functions that are largely distinct from other financial intermediaries. Customarily, meagre periodic payments are required by insurance contracts in return for protection against uncertain, yet potentially severe losses. Among others, this helps to avoid extreme and costly disasters and facilitates lending to commercial enterprises. Also the convenience of insurance allows entrepreneurs to take higher risks and undertake higher return activities more than they would dare in the absence of insurance there by encouraging higher productivity.
