Insurance investment funds and economic growth in Nigeria: An empirical analysis (2000 – 2015)
Insurance is a financial contract and risk transfer mechanism suitable for managing consequences of insurable risks associated with personal and business activities. Insurance plays a vital role in the growth of an economy. The study assessed the contribution of insurance investment funds to economic growth in Nigeria, using 16-years (2000 – 2015) total insurance investment and Gross Domestic Product (GDP) data. Insurance investments have been considered by researchers, academics and analysts due to its importance and consequences on countries‟economic growth. However, the impact of total insurance investment on economic growth in Nigeria using annual data from 2000 to 2015 has not been undertaken. Hence, there is a knowledge gap; and this study filled this knowledge gap. Secondary data, sourced from the Central Bank of Nigeria (CBN) Statistical Bulletin and Nigeria Insurers Digest are used for the study.Pearson‟s movement correlation coefficient and ordinary least square (OLS) method were used for data analysis and hypothesis testing respectively. The findings indicated that there is a strong positive relationship between Nigeria‟s economic growth and total insurance investment; and there is a positive correlation between total insurance investment and GDP in Nigeria. It was recommended that regulation of the Nigeria insurance sector should be enhanced to improve the sector‟s performance and ensure increased total insurance investment in Nigeria economy. The implication for practice is that formulation of economic policies that enhance insurance practices and deepening insurance penetration by the government will increase insurance investment fund.
Keywords: Insurance sector, Gross domestic product, Insurance fund, Economic growth, Nigeria.