Insurance industry investment and Nigeria’s economic Growth: An assessment

International Journal of Development Research

Volume: 
10
Article ID: 
17161
6 pages
Research Article

Insurance industry investment and Nigeria’s economic Growth: An assessment

Helen C. Sunday, Olayemi O. Simon-Oke and Imisi J. Ilesanmi

Abstract: 

The study investigated the relationship of insurance industry investment in Real Estate and Mortgage, Government Securities, Stocks and Bonds among others with economic growth in Nigeria, as a clear departure from indirect insurance investments and Nigerian economy through the capital market for the prospective investors. Quantitative and time series data were employed through secondary source spanning 1980-2017, while the data were subjected to descriptive and parametric method of analysis. The descriptive statistics revealed the highest mean value (273725.1) for insurance investment in Government securities in relation to the least mean value (441.4586) of the real gross domestic product (RGDP).All the variables employed were also reported to be positively skewed, with highest positive skewness from real gross domestic product (RGDP) while insurance investment in real estate and mortgage (IVRM) had the least positive skewness. Huge standard deviations were also reported for all the variables, indicating a large level of variation in the study data .Meanwhile, the OLS multiple regression results ascertained that both insurance investment in real estate and mortgage (IVRM) and insurance investment in government securities (IVGS) decreased the value of real gross domestic product (RGDP) by 5.7569 and 9.183 respectively and the two variables were not statistically significant at 5% level. Also, the result of ADF unit root test revealed that all the variables were stationary at the first difference while the Johansen co-integration test showed the existence of long run relationship between insurance investment and real gross domestic product. The parsimonious error correction result also revealed that only insurance investment in government securities (IVGS) was statistically significant at 5%, the result also showed0.965982 as ECM(-1) coefficient, which confirmed96.6% adjustment speed of the model towards equilibrium. A concerted effort to allocate adequate financial resources to investments with significant impact on the economy should take prominence and also encourage insurance firms to invest directly into areas outside their traditional function to enhance their investment position, increase their income outlets, and consequently contribute significantly to the country’s economic growth and development.

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