Influence of Insurance Sector Development on Insurance Performance in Nigeria from 1996-2018

This study examined the influence of insurance sector development on insurance performance in Nigeria ranging from 1996-2018. The specific objectives are to; Examine the impact of insurance penetration on insurance performance in Nigeria from 1996-2018. and Investigate the effect of insurance density on insurance performance in Nigeria from 1996-2018. The study adopts expostfacto research design. The data were time series, secondary and purely quantitative. They are drawn from sources such as The Statistical Bulletins of Central Bank of Nigeria and the World Bank development indicator and National Insurance Commission (NAICOM). Auto regressive Distributed lag model (ARDL) formed the method of data analysis. ARDL was chosen over the ordinary least square regression (OLS) because ARDL is a dynamic model while OLS is a static model. The results of the ARDL baseline test show that insurance penetration has a positive and significant impact on insurance performance in Nigeria. According to statistics, insurance penetration increases insurance performance by 1%, and this rise contributes 104 percent to the growth of insurance performance in Nigeria. It is given that; the coefficient of the parameter estimates of insurance penetration as 1% and the probability of t-statistics of 0.0014<.05 which is significant. The results of the ARDL baseline test show that insurance density has a favorable and significant impact on insurance performance in Nigeria. According to statistics, insurance penetration increases insurance performance by 1%, and this rise contributes 45 percent to the growth of insurance performance in Nigeria. The explained variation, on the other hand, is 73 percent, indicating that the independent variable adequately explains the dependent variable. It is given the coefficient of the parameter estimates of insurance penetration as 1% and the probability of t-statistics of 0.023<.05 which is significant, it shows that it is positively signed and statistically significant. We concluded that insurance penetration has a positive and major impact on insurance performance in Nigeria, and insurance density has a positive and large impact on insurance performance in Nigeria, according to the study's goal. We recommended that, to avoid settling of incessant claims, thorough awareness should be carried out prior to attempting penetration. And in order to limit the number of claims for each earned premium, the Nigerian insurance market must efficiently regulate the amount of insurance concentration.