Insurance Market Penetration and Business Performance: Evidence from Nigeria and Implications for Sustainable Development in Africa
Anikwe Grace 1, Ezema Clifford Anene2 and Amobi Ogbodo3
1Lecturer in Department of Marketing, Faculty Of Management Sciences, Enugu State University of Science And Technology, (ESUT), Enugu, Nigeria
2Senior lecturer in Department of Insurance and Risk Management, Faculty of Management Sciences, Enugu State University of Science and Technology, (ESUT), Enugu Email. clifford.ezema@esut.edu.ng
3lecturers in Department of Cooperative Economics &Management, Faculty of Management Sciences, Enugu State University of Science and Technology, (ESUT), Enugu, Nigeria
ABSTRACT
Insurance market penetration is the total amount of insurance premium generated in countries which are expressed as a percentage of the Gross Domestic Product (GDP). Under ideal expectation. Insurance business activities were expected to be increasing at arithmetic means but this had not been so, the result of this stunted growth has been attributed to low insurance penetration, activities of macroeconomic influences, inadequate insurance awareness, low supervision regulation to mention but a few. This study wants to examine the impact of Insurance penetration on insurance performance in Nigeria both on the short and long run and if long run relationship exists, an error correction in Nigeria will be estimated using Auto regressive distributed lag Model. Result reveals that insurance penetration positively but none significantly impacted on insurance performance in Nigeria. Also, estimation from ARDL cointegration reveals that there are long run relationship existing between insurance penetration and insurance performance in Nigeria. From the long run relationship, it was deduced that error correction existed. Error arising from low insurance penetration diverted from equilibrium constant which will take thirteen years, one month and twenty-one days to correct the disequilibrium. Based on the above findings, it was concluded that low insurance image impacted positively but none significantly to insurance performance in Nigeria. It can now be deduced that insurance penetration is not the only indices that determine insurance performance in Nigeria, hence other factors that can influence insurance performance are: adequate supervision and regulation, creation of insurance awareness, promotion of insurance image, control of various unethical practices, insurance education, insurance workers reorientation etc. With this, insurance performance will be enhanced.
Keywords: Insurance penetration, Insurance performance, insurance premium, ARDL
CITE AS: Anikwe Grace, Ezema Clifford Anene and Amobi Ogbodo (2025). Insurance Market Penetration and Business Performance: Evidence from Nigeria and Implications for Sustainable Development in Africa. INOSR ARTS AND MANAGEMENT 11(2):37-49. https://doi.org/10.59298/INOSRAM/2025/112.3749