Table of Contents
ABSTRACT.. 2
CHAPTER ONE.. 5
INTRODUCTION.. 5
Background to the Study.. 5
1.2 Statement of the Problem... 6
1.3 Objectives of the Study.. 7
1.4 Research Questions. 8
1.5 Research Hypothesis. 8
1.6 Significance of the Study.. 8
1.7 Scope of the Study.. 9
1.8 Limitations of the Study.. 9
1.9 Organization of the Study.. 10
CHAPTER TWO.. 12
REVIEW OF RELATED LITERATURE.. 12
2.1 Introduction.. 12
2.2 Theoretical Review.. 13
2.3 Conceptual Review.. 15
2.4 Empirical Review.. 18
2.5 Summary of Literature Review.. 20
Chapter Three.. 21
Research Methodology.. 21
Research Design.. 21
Area of the Study.. 22
Data Collection.. 22
Sampling Strategy.. 22
Data Analysis. 23
Ethical Considerations. 24
Conclusion.. 24
CHAPTER FOUR.. 24
DATA ANALYSIS AND INTERPRETATION.. 24
4.1 Preamble.. 24
4.2 Socio-Demographic Characteristics of Respondents. 24
TABLES BASED ON RESEARCH QUESTIONS.. 27
4.3 Analysis of the Respondents’ Views on Research Question one:. 27
4.4 Testing Hypothesis. 38
CHAPTER FIVE.. 41
SUMMARY CONCLUSION AND RECOMMENDATION.. 41
5.1 Summary of Findings. 41
5.2 CONCLUSION.. 42
5.3 RECOMMENDATION.. 42
REFERENCES.. 43
Questionnaire Detailed research questionnaire with checkboxes for: the impact of insurance on economic growth in Nigeria, focusing on AXA Mansard Insurance: 46
CHAPTER ONE
INTRODUCTION
Background to the Study
Background to the Study
Insurance plays a pivotal role in the economic development of any nation, acting as a stabilizing force against financial uncertainties and risks. In the context of Nigeria, the impact of insurance on economic growth is a topic of significant interest and importance. As Africa's largest economy, Nigeria has witnessed steady growth and development in recent years, and the role of insurance in sustaining this progress cannot be overstated. According to a study by Odusami and Adebisi (2016), insurance facilitates risk management for businesses and individuals, thereby fostering investment and entrepreneurship which are crucial drivers of economic growth.
Moreover, insurance enhances financial stability by providing a safety net against unexpected events, thus encouraging savings and investment. This sentiment is echoed by Oke (2018) who highlights how insurance contributes to the overall stability of the financial system, promoting confidence among investors and lenders. By mitigating risks associated with business operations, insurance encourages firms to expand their activities and explore new opportunities, thereby stimulating economic growth and development. This sentiment is supported by the findings of a study conducted by Olalude and Adewole (2019), which underscored the positive correlation between insurance penetration and economic growth in Nigeria.
Furthermore, insurance plays a crucial role in infrastructure development, particularly in emerging markets like Nigeria. Adequate insurance coverage is essential for attracting foreign investment in large-scale infrastructure projects such as energy, transportation, and telecommunications. As noted by Afolabi (2020), insurance provides the necessary risk mitigation tools for investors and lenders, thereby facilitating the financing and execution of critical infrastructure projects. This symbiotic relationship between insurance and infrastructure development not only spurs economic growth but also enhances the overall quality of life for citizens by improving access to essential services.
1.2 Statement of the Problem
The impact of insurance on economic growth in Nigeria is a pertinent issue requiring thorough investigation and analysis. Despite the growing significance of the insurance sector in Nigeria's economy, there remains a dearth of comprehensive studies examining the direct correlation between insurance penetration and economic growth. This knowledge gap impedes policymakers, regulators, and industry stakeholders from formulating informed strategies to leverage the potential benefits of insurance for sustainable economic development. Furthermore, existing literature predominantly focuses on developed economies, thereby neglecting the unique dynamics and challenges faced by Nigeria's emerging market. By addressing this gap, this research aims to shed light on the nuanced mechanisms through which insurance influences economic growth in Nigeria, offering insights that can inform policy interventions and foster a more robust and inclusive financial ecosystem. Adebisi (2016).
Recent studies suggest that a well-developed insurance sector can play a pivotal role in enhancing economic resilience and stability by mitigating risks and facilitating investment. However, the Nigerian insurance industry faces numerous structural constraints, including low penetration rates, inadequate regulatory frameworks, and a lack of public awareness. These challenges hinder the sector's ability to effectively mobilize savings, channel funds into productive investments, and protect individuals and businesses from unforeseen shocks. Thus, a comprehensive understanding of the impact of insurance on economic growth in Nigeria is essential for policymakers and industry stakeholders to devise strategies that promote financial inclusion, stimulate entrepreneurship, and foster long-term sustainable development. By examining the interplay between insurance dynamics and economic variables within the Nigerian context, this research seeks to offer practical recommendations to unlock the full potential of the insurance sector as a catalyst for economic growth and prosperity. Olalude and Adewole (2019).
1.3 Objectives of the Study
The main objective of the study is to examine the impact of insurance on economic growth in Nigeria. Specific objectives of the study are:
- 1. To analyze the relationship between insurance penetration and economic growth.
- 2. To investigate the role of insurance in mobilizing domestic savings and investments.
- To explore the impact of insurance on risk management and business growth.
1.4 Research Questions
To guide the study and achieve the objectives of the study, the following research questions were formulated:
- To what extent does the insurance penetration rate influence Nigeria's economic growth?
- How do insurance premiums contribute to the pool of investable funds in Nigeria's capital market?
- How does insurance coverage affect risk perception and investment decisions by Nigerian businesses?
1.5 Research Hypothesis
The following research hypothesis was developed and tested for the study:
Ho: There is no statistical significant relationship between insurance and economic growth in Nigeria.
1.6 Significance of the Study
The study is important for many reasons. The following are the major stakeholders this paper through its practical and theoretical implications and findings will be of great significance:
Firstly, the paper will benefit major stakeholders and policy makers in the Insurance sector. The various analysis, findings and discussions outlined in this paper will serve as a guide in enabling major positive changes in the industry and sub-sectors.
Secondly, the paper is also beneficial to the organizations used for the research. Since first hand data was gotten and analysed from the organization, they stand a chance to benefit directly from the findings of the study in respect to their various organizations. These findings will fast track growth and enable productivity in the organisations used as a case study.
Finally, the paper will serve as a guide to other researchers willing to research further into the subject matter. Through the conclusions, limitations and gaps identified in the subject matter, other student and independent researchers can have a well laid foundation to conduct further studies.
1.7 Scope of the Study
The study is delimited to AXA Mansard Insurance. Findings and recommendations from the study reflects the views and opinions of respondents sampled in the area. It may not reflect the entire picture in the population.
1.8 Limitations of the Study
The major limitations of the research study are time, financial constraints and delays from respondents. The researcher had difficulties combining lectures with field work. Financial constraints in form of getting adequate funds and sponsors to print questionnaires, hold Focus group discussions and logistics was recorded. Finally, respondents were a bit reluctant in filling questionnaires and submitting them on time. This delayed the project work a bit.
1.9 Organization of the Study
The study is made up of five (5) Chapters. Chapter one of the study gives a general introduction to the subject matter, background to the problem as well as a detailed problem statement of the research. This chapter also sets the objectives of the paper in motion detailing out the significance and scope of the paper.
Chapter Two of the paper entails the review of related literature with regards to corporate governance and integrated reporting. This chapter outlines the conceptual reviews, theoretical reviews and empirical reviews of the study.
Chapter Three centers on the methodologies applied in the study. A more detailed explanation of the research design, population of the study, sample size and technique, data collection method and analysis is discussed in this chapter.
Chapter Four highlights data analysis and interpretation giving the readers a thorough room for the discussion of the practical and theoretical implications of data analyzed in the study.
Chapter Five outlines the findings, conclusions and recommendations of the study. Based on objectives set out, the researcher concludes the paper by answering all research questions set out in the study.
