The Influence of Life Insurance Premium on Insurance Penetration in Nigeria

Abstract

This study assessed the influence of life insurance premium on insurance penetration in Nigeria. Specifically, this study examined the trend of life insurance premium and insurance penetration in Nigeria, using data of 1981 to 2023. These data were extracted from secondary sources for insurance penetration, life insurance penetration and control variables (inflation rate, exchange rate, interest rate, gross domestic product growth rate and population growth rate). Data were analysed with charts and ARDL co-integration methods based on the objectives formulated. Accordingy, result demonstrated upward trend in life insurance premium as well as downward trend in insurance penetration. On the other hand, the result revealed that life insurance premium has significant positive effect on insurance penetration on the short run, but insignificant negative effect on the long run. Nevertheless, this study concluded that life insurance premium has influence on insurance penetration, although significance is limited to the short run. Hence, this study recommended that life insurance businesses in Nigeria should ensure to put in more effort into creating awareness, advertisement and promotions to enhance life insurance demand as well as facilitate penetration rate