EFFECT OF PREMIUM INCOMES AND INTEREST RATES ON ECONOMIC GROWTH IN NIGERIA

L. A. AJIJOLA; G. C. MESIKE; U. A. IBEKWE

L. A. AJIJOLA Department of Actuarial Science and Insurance Faculty of Management Sciences, University of Lagos
G. C. MESIKE Department of Actuarial Science and Insurance Faculty of Management Sciences, University of Lagos
U. A. IBEKWE Department of Actuarial Science and Insurance Faculty of Management Sciences, University of Lagos

Keywords: Premium Incomes, Interest Rates, Economics Growth, Financial Markets

Abstract

Despite the challenges plaguing Nigeria insurance industry, it has experienced a growing volume of business underwritten in the past years which amount to an increase in premium collections with a consequential positive effect on the GDP. This research work, therefore, sets out to appraise the effect of premium income and interest rates on economic growth in Nigeria. Five insurance companies were selected to carry out the study for the period between 2010 and 2019. We employed econometric techniques analysis (as a test of descriptive statistics and co-integration) in our methodology. The variables were also subjected to a stationarity test and pooled ordinary least square estimation, fixed effect estimation, and random effect estimation were performed on them. The results show that insurance premius, when combined with net premium, profit after tax and profit before tax have a considerable impact on the Nigeria economic development.