Investment on Insurance Premiums and Economic Growth in Nigeria

The empirical study investigated the effect of investment on insurance premiums and its impact on economic growth in Nigeria over a period 1982-2012. To achieve the objectives of the study, data was collected from National Insurance Commission (NAICOM) and Central Bank of Nigeria (CBN) Statistical bulletin. The data collected were analyzed using relevant econometric model test such as OLS, ADF unit root, Johanson Co-integration, VAR. The result revealed that the estimated premium paid on health insurance (PPHI), accident insurance (PPAI), life assurance (PPLA) and property insurance (PPPI) are directly related to real gross domestic product (RGDP). This suggests an evidence of statistical significance of the endogenous variables on the economic growth. The overall model is statistically significant as the probability value of F-statistics is less than 5%. Durbin Watson statistic value falls between (2.0 and 4.0) standard scale; confirming no presence of serial autocorrelation. R2 is 89% implying that the coefficient of determination (R2 ) is relatively high at 91% which adjudge the model as accurate and fitted. The value of adjusted R-squares (0.79) indicates that the exogenous variables can explain economic growth positively with proceeds from insurance by 79% while 21% of economic growth cannot be explained by exogenous variables as a result of some financial factors. Johanson Cointegration, Val model, and Granger causality test revealed a long run relationship with the endogenous variable thereby the writer recommend that a proper insurance seminar and workshop should be encouraged to the pupils to achieve the targeted goal and enhance economic growth