Does insurance market activity promote economic growth? evidence from Nigeria

This study examined the dynamic relationships between insurance market development, and economic growth in Nigeria using the Johansen approach to cointegration analysis, Vector Error Correction Model (VECM), and Granger Causality test on yearly data over the period 1985 to 2017. Two indicators of insurance sector development (total insurance premium and insurance density) were employed.The results show that total premium (life and non-life) to nominal GDP exerts positive and significant impact onreal GDP in the long run. Insurance Density exerts negative and significant impact on real GDP. The granger causality test indicates that there is a weak unidirectional causality running from, insurance density to real GDP. The study established weak relationship between insurance development and growth in Nigeria. The study recommends the need to establish financial institutions that would strengthen and resolve the institutional and structural problems in the economy and create structures that would sustain other causal factors that mediates growth and financial intermediation (insurance side) where appropriate