Macroeconomic Aggregates and Insurance Stock Returns in Nigeria, 1996 To 2025 Evidence from Listed Insurance Firms on the Nigerian Exchange

Ezema, Clifford A.¹; Jinadu, Margaret²; Onuoha, Donatus C.³

¹Department of Insurance and Risk Management, Faculty of Management Sciences, Enugu State University of
Science and Technology, Enugu, Nigeria. Email: clifford.ezema@esut.edu.ng

²Department of Insurance, College of Social and Management Sciences, Lagos State University of Science and
Technology, Lagos, Nigeria. Email: jinadu.mn@lasustech.edu.ng

³Department of Insurance, School of Financial Studies, Federal Polytechnic, Oko, Anambra State, Nigeria. Email:
eduonuoha@yahoo.com

                                                           Abstract
This study examines the relationship between selected macroeconomic aggregates and insurance stock returns in Nigeria over the period 1996 to 2025. The focus on insurance equities is deliberate. Although Nigerian stock market research has often used the broad All Share Index, insurance firms face a different risk structure because underwriting income, claims costs, investment income and regulatory capital requirements respond directly to inflation, interest rates, exchange rate movements and real economic activity. Annual secondary data were obtained principally from Central Bank of Nigeria statistical publications, Nigerian Exchange market records and insurance market reports. The study applied the Phillips
Perron unit root test and an autoregressive distributed lag model to accommodate the mixture of I(0) and I(1) variables observed in the data. The results show a strong persistence effect in insurance stock returns. Real gross domestic product and private sector credit have positive but statistically insignificant coefficients, while interest rate and inflation carry negative but insignificant coefficients. Exchange rate has a positive coefficient at the 10 per cent level, suggesting that currency movements may matter for market valuation, although the direction depends on insurers’ foreign currency exposure and the wider investment climate. In my view, the main contribution of the paper is not simply that macroeconomic variables affect equities; rather, it shows that the insurance sub sector reacts in a more uneven way than the aggregate market. The study recommends disciplined inflation management, moderate interest rate policy, credible exchange rate management and stronger insurance sector disclosure as practical routes to improving investor confidence in Nigerian insurance equities.

Keywords: macroeconomic aggregates; insurance stock returns; inflation; interest rate; exchange rate; ARDL; Nigerian Exchange.

CITE AS: Ezema, Clifford A.; Jinadu, Margaret; Onuoha, Donatus C. (2026). Macroeconomic Aggregates and Insurance Stock Returns in Nigeria, 1996 to 2025 Evidence from Listed Insurance Firms on the Nigerian Exchange. INOSR HUMANITIES AND SOCIAL SCIENCES 12(1): 32-37.
https://doi.org/10.59298/INOSRHSS/2026/121.3237