The portfolios of insurance investments and private sector growth in Nigeria (1990-2018): investigating the nexus

Abstract

The study investigated the portfolios of insurance investments and private sector growth in Nigeria; for the period (1996-2018). Private sector output is taken as the dependent variable to measure the private sector performance; whereas, cash deposits, government securities and bill of exchange are employed as the independent variables to measure portfolios’ insurance investments in Nigeria. Hypotheses formulated were tested using Ordinary Least Squares (OLS) technique. The study revealed a significant relationship between cash deposit and Gross Domestic Product in Nigeria. Government securities has a significant relationship with Gross Domestic Product in Nigeria. Bill of exchange has a significant relationship with Gross Domestic Product in Nigeria. The coefficient of determination indicated that about 64% of the variations in private sector growth can be explained by changes in insurance industry variables in Nigeria. The study concluded that the portfolios insurance investments significantly contributed to the growth and development of the private sector economy. The study recommends that policy makers should pursue an all-inclusive growth promoting financial system. Awareness should be increased to raise the level of patronage. Relevant agencies like the Police and the Federal Road Safety Commission should prosecute unlicensed and uninsured vehicles. Insurance companies should adopt faster methods of processing claims to enhance their image and patronage.

Keywords: Insurance, Investment Portfolio, Private Sector Growth, Nigeria