Insurance and Economic Development in Nigeria: Co-Integration and Causality Analysis

Ukpong, Mfon Sampson; Ikechukwu, A.

doi:10.19085/journal.sijmd040401

Cited by 8 publications

(7 citation statements)

References 8 publications

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“…Also, Omoke (2011) found a low insurance market activity in Nigeria and that Nigerians have not fully embrace the insurance industry despite its importance to the growth of the economy. It however supports the findings made by Solomon (2018); Ukpong and Acha (2017) whose studies showed a positive link between insurance assets and GDP. The implication is that increasing the assets growth of insurance industry allows them to engage in more investments and savings mobilization through premium.…”

Section: Discussion Of Findingssupporting

confidence: 90%

“…Empirical studies on the contribution of insurance premium to Nigeria's economic growth have provided mix results. Studies by Oke, 2012;Solomon (2018); Ukpong & Acha (2017) indicate a positive relationship while Akpan and Joseph (2017); Torbira & Ogbulu (2013) provided a contrary report. It is pertinent therefore, to determine the true effect of insurance premium on Nigeria economy using current data.…”

Section: Introductionmentioning

confidence: 98%

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Insurance Premium And Economic Performance In Nigeria: A Variance Decomposition Approach

Uruakpa¹

2019

ABR

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This study assessed insurance premium and Nigeria's economic performance. It aimed at finding out the relationship insurance premium, investment and assets have with Nigeria's GDP. Descriptive statistics, Augmented Dickey Fuller Unit Root Test, Johansen cointegration, OLS regression, variance decomposition and granger causality tests were adopted. Findings revealed that all the series are significant and but not normally distributed. The correlation matrix shows that there is high and positive correlation between the independent variables. The results of the unit root tests using Augmented Dickey-Fuller test show that all the variables do not have unit roots (that is, are stationary) at 5% in their first differences. The Johansen co-integration result confirms that there is long run relationship between insurance activities and economic growth in Nigeria. The OLS result suggests that 93.11 percent of the total variation found in GDP is explained by the presence of total assets, investments and premium of the insurance industry sector while the F-Statistics has a value of 163.1080 which is highly significant at 5% confidence level implying that insurance industry play significant role in development of the Nigerian economy. The Variance Decomposition for 10 period indicates that Insurance sector investment is more significant than premium for most of the periods. However, since premium represents revenue for the insurance industry it has positive impact on GDP for all the periods while GDP responds positively. This granger causality result shows that there is granger causality relationship between insurance premium, investment and assets have granger causality with GDP. From the findings, it recommends that insurance business authorities should review its reform policy and ensure that policies that will strengthen premium mobilization in Nigeria are put in place. Insurance companies need to invest more of their funds in productive sectors of the economy.

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Section: Discussion Of Findingssupporting

confidence: 90%

Section: Introductionmentioning

confidence: 98%

Insurance Premium And Economic Performance In Nigeria: A Variance Decomposition Approach

Uruakpa¹

2019

ABR

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“…However, this definition falls short as it does not fully articulate the essence of microfinance. Similarly, Ukpong & Acha (2019) characterized it as an entity offering basic financial products to low‐income clients. By juxtaposing these two definitions, it becomes evident that microfinance generally extends financial products to low‐income individuals in emerging economies.…”

Section: Literature Reviewmentioning

confidence: 99%

Financial management practices, competitive advantage and loan performance of selected microfinance institutions (MFIs) in Ghana

Saeed

2023

Bus Strat Dev

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This study examines how financial management practices and competitive advantage affect loan performance of microfinance institutions (MFIs) in Ghana's Ashanti Region. The research employs a cross‐sectional design with a sample of 85 Ashanti Region MFIs, following Krejcie and Morgan's guidelines for sample selection. Employing a positivist approach with quantitative analysis, primary data comes from closed‐ended questionnaires given to Credit Directors, Credit Department, and Risk Managers, selected randomly from staff lists. Results reveal financial management practices significantly impact loan performance and competitive advantage. However, competitive advantage, under controlled conditions, does not significantly predict loan performance. This highlights financial management's crucial role in shaping loan performance and competitive advantage in MFIs. The study suggests that sustaining growth requires Ghana's Central Bank to enforce adherence to standards for liquidity management. This research adds a fresh perspective to understanding financial management practices, competitive advantage, and loan performance in Sub‐Saharan Africa's MFIs.

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“…One of the basic requirements of an insurance contract is the premium which serves as the consideration (Ramos, 2017;Ukpong and Acha, 2017;Fiedler, 2018). Without this consideration, there is no cover.…”

Section: Literature Reviewmentioning

confidence: 99%

“…In exchange of payments from the insured called premium, the insurer agrees to pay the policyholder a sum of money upon the occurrence of a specific event. Insurance is considered one of the financial risk management strategies that can help individuals and societies deal with risk effectively (Ukpong and Acha, 2017).…”

Section: Introductionmentioning

confidence: 99%

An Empirical Investigation Into the Relationship Between Premiums and Claims Paid in the Nigerian Insurance Industry: A 2000-2017 Analysis

Sampson

2020

Int. j. manag. entrep. res

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This study is an investigation into the relationship between premiums received and claims paid in the Nigerian insurance industry over the period 2000-2017. Data on gross premiums received and gross claims paid over the period were gotten from the Central Bank of Nigeria (CBN) statistical bulletin, National Insurance Commission (NAICOM) and the Nigerian Insurers Association (NIA) annual reports. Stationarity test carried out on the data reveal that data is stationary at the 1%, 5% and 10% levels of significance. The cointegration test reveals that no cointegration exists among the variables which imply that there is no long run equilibrium relationship between the variables. Using the ordinary least squares regression, the calculated probability value of 0.167 is higher than the 0.05 significant value, hence we accept the null hypothesis that there is no significant relationship between claims paid and premiums received in the Nigerian insurance industry. The coefficient of determination (R2) of 0.91157 indicates that gross premiums contribute 91.2 percent to variations in gross claims while the remaining 8.6 percent is owing to factors outside the regression model. We therefore conclude that claims paid by insurers is not a function of premiums received and recommend that insurers should endeavour to settle claims promptly and equitably to increase client satisfaction.

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Insurance and Economic Development in Nigeria: Co-Integration and Causality Analysis

Abstract: We examine the cointegration and causal relationship between insurance and economic development in Nigeria using time series data from 1990 -2013

Cited by 8 publications

References 8 publications

Insurance Premium And Economic Performance In Nigeria: A Variance Decomposition Approach

Insurance Premium And Economic Performance In Nigeria: A Variance Decomposition Approach

Financial management practices, competitive advantage and loan performance of selected microfinance institutions (MFIs) in Ghana

An Empirical Investigation Into the Relationship Between Premiums and Claims Paid in the Nigerian Insurance Industry: A 2000-2017 Analysis

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