Contributions of Non-Life Insurance Firms to Economic Growth in Nigeria (1981 - 2017)

This study examines the contributions of non-life insurance firms to economic growth in Nigeria. Specifically, the study establishes the relationship between profitability, penetration, density growth rates of non-life insurance firms and economic growth rate in Nigeria; and determines the relationship between claims payment growth rate in non-life insurance policies, investment yields and economic growth rate in Nigeria. Poor patronage of non-life insurance policies has resulted in low premium collection, low profitability, low insurance penetration and density, low investment yields as well as capital for investment. Lack of prompt and fair claims payment attracted low patronage from existing and potential policyholders thereby leading to abysmal contribution to economic growth. The study covered the period from 1981 to 2017 using the secondary data from the (CBN) Statistical Bulletin, NAICOM Annual Reports and Nigerian Insurers Digest among others. The study adopted desk research design and ex post facto research design. The secondary data were presented in table and analyzed using descriptive statistics and trend analysis. The t-statistics values from Ordinary Least Squares (OLS) regression analysis were used to test the research hypotheses. The findings revealed that there is a significant relationship between profitability growth rate of non-life insurance firms and economic growth rate in Nigeria. Non-life insurance density rate has a negative and insignificant contribution to per capita income growth in Nigeria. The finding further revealed that there is a significant relationship between claims payment growth rate of non-life insurance firms and economic growth rate in Nigeria. Additionally, there is a joint significant relationship between profitability, claims payment of non-life insurance firms and economic growth rate in Nigeria.It was concluded that profitability, penetration, claims payment, investment yields growth of non-life insurance firms made strongest contributions to economic growth in Nigeria. It was recommended that there is need to increase the sales volumes of non-life insurance policies for more premium income, penetration and density growth. There is need to reinvest the profit of non-life insurance firms for more contribution to economic growth. Genuine claims should be promptly and fairly pay to policyholders so that they in turn can reinvest part of the claims amount into the economy in order to stimulate economic growth. To increase the investment yields of non-life insurance firms, there is need to diversify their investment portfolios.