Comparative Analysis of Life and Non-Life Insurance Businesses and Development of Nigerian Economy

Despite the evident potential of the insurance sector to bolster economic growth and stability, Nigeria's insurance penetration rate remains critically low. This underutilization highlights a significant gap in the potential economic benefits that could be harnessed from a robust insurance industry. Hence this study examined the effect of life and non-life insurance business on the development of the Nigerian economy. The specific objectives were to analyze the impact of life insurance on Nigeria's gross domestic product (GDP), analyze the impact of non-life insurance on Nigeria's gross domestic product (GDP), investigate the causal relationship between life insurance and gross domestic product in Nigeria and investigate the causal relationship between non-life insurance and gross domestic product in Nigeria from 1990 to 2023. The theories adopted for this study were financial intermediation theory, risk management theory, and human capital theory. However, the study was anchored on the financial intermediation theory. An ex-post facto research design was adopted for the study. Data used in this research were secondary data and were gathered from the reports and bulletin of Central Bank of Nigeria (CBN) 2023 the Nigerian Insurance Commission (NAICAOM) for the period under study. The regression results indicate that both life and non-life insurance have a significant impact on Nigeria's GDP in both the short and long-run periods, hence they positively and significantly impact economic development in Nigeria. Based on the findings of the study, it was recommended that insurance companies should focus on diversifying their product offerings and making insurance more accessible to a broader segment of the population. Also, insurance companies should invest in public awareness campaigns and educational programs to improve understanding and trust in insurance products.