JEFMS Journal

ABSTRACT:

This study examined the effect of Insurance sub-sector development on economic growth and sustainability in Nigeria. It specifically examined the impact of insurance premium on economic growth in Nigeria, ascertain the effects of gross insurance claim on economic growth in Nigeria and determine whether insurance income has any impact on economic growth in Nigeria. To achieve these objectives the study employed various econometric techniques such as Augmented Dickey Fuller (ADF) test for the unit root test, Engle- Granger (E-G) causality test & Johansen’s co -integration and Parsimonious Error Correction modeling in which variations insurance premium, gross insurance claims and insurance income where regressed on GDP using time series data from 1986-2015. The secondary data casing the time series frame were collected from Central Bank of Nigeria statistical bulletin. The results of the analysis revealed the presence of long run relationship between insurance premium and economic growth in Nigeria. The result also revealed that the error correction model analysis though not individually statistically significant, the variables, insurance premium, gross insurance claim and insurance income were jointly statistically significant in determining economic growth in Nigeria. The study concluded that Nigeria has enormous insurance potentials waiting to be tapped into for rapid economic growth in Nigeria.

KEYWORDS:

Insurance Sub-Sector Development, Insurance Premium, Gross Insurance Claim and Insurance Income.

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