Assessing the Impact of Non-Life Insurance Firms on Nigerian Economic Growth: An Analysis of Profitability, Claims Payment, and Sector Contributions

Abstract

This research adopted an ex post facto research design to examine the correlation between licensed life and non-life insurance companies in Nigeria from 2017 to 2021 and the nation's economic growth, utilizing Minkova's (2002) Insurance Risk Theory model. The study population encompassed 58 licensed insurance firms, comprising 10 composite, 31 specialist non-life, and 17 life insurance companies. Secondary data from various sources, including the Central Bank of Nigeria, National Insurance Commission (NAICOM) Annual Reports, and others, underwent analysis using multiple linear regression models. The findings indicated positive growth in the insurance industry over the five-year period, marked by a consistent increase in gross premium income. Evaluation of net premium income, annual growth rates, and retention ratios for non-life and life insurance entities revealed consistently positive patterns. The non-life insurance sector demonstrated stability, with retention ratios surpassing 50%, indicative of insurer confidence. Analysis of net claims paid in the non-life segment demonstrated a significant rise. The observed positive trends in the insurance sector underscore its resilience and potential contribution to the economic development of the nation. Based on the findings, it is recommended that the Nigerian government should create policies that encourage patronage of non-life insurance policies, and non-life insurance firms should improve their claims payment procedures to encourage policyholders. Additionally, non-life insurance firms should invest in infrastructure and other long-term investments to foster economic growth and enhance monetary inter-mediation