Impact of Insurance Industries To The Growth And Development of N : Current School News

Impact of Insurance Industries To The Growth And Development of Nigerian Economy

Filed in Current Projects, Insurance by on July 7, 2021

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Impact of Insurance Industries To The Growth And Development of Nigerian Economy.

ABSTRACT

The study examined the impacts of insurance industries on Nigeria’s economic growth from 1981 – 2015 using the ordinary least squares estimation method and secondary data sources obtained from the central bank of Nigeria’s statistical bulletin.

The study provided evidence that the insurance sector exerted a positive significant effect on Nigeria’s economic growth. The study, therefore, recommended that if the government wants to grow the Nigerian economy, it should focus on the development of the insurance sector.

Furthermore, policies that will bring insurance services to the people should be formulated and implemented by the government.

INTRODUCTION

Background to the Study

The role of the insurance sector in mitigating sudden negative occurrences thereby stimulating economic growth cannot be over-emphasized.

Both in developed and developing countries, the insurance sector contributes to economic growth both sectorally and geographically.

Since the insurance sector has links to sectors such as industrial, transportation, agriculture, mining, petroleum, and trade both locally and internationally, its relevance to general human activities has continued to grow for all ages as all categories of risks increase.

Recently, several interesting lines of research have begun to map the specific contributions of insurance to the economic growth processes as well as to the wellbeing of the poor.

In particular, several studies have focused on the relationship between insurance and economic growth.The origin of insurance in Nigerian can be traced to the activities of European merchants in the West African coast.

This was influenced by two factors; first, the expansion of cash crop production for exports, and the upward surge in economic activities in the 1890s; second, the British desire to protect its interest and properties in the protectorate of West Coast Africa.

According to Uche and Chikeleze (2001), increased trade commerce (in Nigeria) led to increased activities in shipping and banking, and it soon became necessary for foreign firms to handle some of their risks locally.

They further show that “trading companies were therefore subsequently granted insurance agency licenses by foreign insurance companies”.

The Nigerian economy at that time depended so much on agriculture, so the major risk the European merchants were confronted with, was the risk of transporting their cash crops to Europe.

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CNS Team.

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