Life Insurance Development and Economic Growth: A Case Study of Nigeria (2000-2022)

Abstract

This research looked at the development of life insurance and economic growth using Nigeria as a case study from 2000 to 2022. Specifically, the authors examined the causal relationship between life insurance development and economic growth, analyzed the effect of life insurance penetration and life insurance density on real GDP growth rate. Data used for the study were collected from sources including the World Development Indicator database, Global Financial Development Indicator database, NIA digest database, and Central Bank of Nigeria statistical bulletin. Granger causality test and Autoregressive Distributed Lag (ARDL) co-integration were used in the investigation approach. The granger causality test result indicated that there is no causal connection between Nigeria's economic growth and the development of life insurance. According to ARDL estimate results, life insurance density and penetration had a negligible positive effect on the real GDP growth rate. Hence, this study established that life insurance development is yet to contribute to economic growth in Nigeria, due mainly to its low level and mode of operations. Therefore, this study recommended among others that life insurance institutions should also increase their scope of operations to be directly involved in business investments other than financial market investment to enhance their level of significance in the growth process of Nigeria.