Abstract
Research Objective: This study measured the sustainability reporting of the causal relationship between insurance and economic growth in Nigeria from 1996 to 2023. Specifically, it examined the causality between insurance investment, insurance premiums, insurance assets, and economic growth.
Methodology: An ex-post facto research design was adopted, with data sourced from the Central Bank of Nigeria Statistical Bulletin (2023). The augmented Dickey-Fuller test was applied to determine the diagnostic properties of the variables, and the Jarque-Bera test confirmed that the variables were normally distributed. Causality analysis was conducted, using Gross Domestic Product (GDP) as a proxy for economic growth, with insurance premiums, insurance investments, and insurance assets serving as explanatory variables.
Findings: The results indicated a bi-directional causal relationship between insurance premiums, insurance assets, insurance investments, and economic growth. This suggests that the growth of the insurance industry drives economic growth, and vice versa, creating a mutually reinforcing relationship. This dynamic fosters financial stability, economic resilience, and effective risk management, contributing to overall economic development.
Conclusion: The study concluded that insurance premiums, investments, and assets have a strong relationship with economic growth in Nigeria. The mutual interaction between the insurance industry and economic growth highlights the importance of a robust insurance sector for sustainable development.
Recommendation: The study recommends making insurance policies mandatory for individuals and businesses to protect investors and ensure sustained economic growth. Regulatory authorities should enforce policies that promote transparent and efficient fund management by insurers. Additionally, investors should diversify their portfolios to enhance returns and strengthen their capacity for claims payment, thereby reinforcing their contribution to economic growth.
Key words: Insurance premium, Insurance investment, Insurance assets and economic growth.
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