INSURANCE COMPANIES` OPERATIONS AND ECONOMIC GROWTH: AN EMPIRICAL ANALYSIS FROM NIGERIA

Abstract

Insurance, functioning as a financial intermediary, contributes significantly to the economic progress of any nation and enhances the efficiency of business operations. The Nigerian insurance industry is a crucial sector and nevertheless, the negligence of the insurance sector in Nigeria renders conducting business in the country exceedingly perilous, given the prevailing insecurity rates. Following this, the present study aims to investigate insurance companies’ operation and economic growth an empirical study from Nigeria. The participant in this study consists of all licensed insurance businesses functioning inside Nigeria's financial services industry, regulated by the National Insurance Commission (NAICOM). The sample frame includes data from 2010 to 2023, yielding time-series observations for each variable. This study employs quantitative and ex-post facto design. Furthermore, the study used a time-series econometric methodology, enabling the identification of causality and the long-term and short-term dynamics between indicators of the insurance sector and economic growth. The findings show that insurance premiums, investment and claims grew substantially from 1990 to 2025 out spacing GDP growth and regression results also show significant positive impacts of insurance on Gross Domestic Product (GDP) with investment being the strongest channel. The study recommends that there is a necessity for extensive sensitization initiatives to elevate public understanding of the advantages of insurance. Educational institutions, including schools, universities, and vocational programs, ought to incorporate insurance education into their curricula to foster an insurance-aware culture.