The Impact of Urbanization on Life Expectancy and Insurance Demand in South West Nigeria

This study examines the relationship between urbanization trends, life expectancy improvements, and life insurance demand in South West Nigeria. The Southwest is Nigeria's most urbanized geopolitical zone, with Lagos State maintaining the highest urban population concentration. Urbanization is associated with improved healthcare access, better nutrition, and higher incomes, all of which contribute to longer life expectancy. These demographic shifts have direct implications for mortality assumptions, insurance product design, and market demand estimation. This study uses secondary data from the National Population Commission, National Bureau of Statistics, and NAICOM premium income reports for states in the South West zone for the period 2013 to 2023. Urban population growth rates are correlated with changes in life expectancy estimates and life insurance premium income using time series regression. Granger causality tests assess directional relationships. Findings reveal a significant positive relationship between urbanization and life expectancy improvement in the South West, with Lagos and Ogun States showing the fastest mortality improvement rates. Life insurance premium income grew significantly with urban population growth but lagged behind life expectancy improvements, suggesting unmet demand. The study concludes that urbanization creates favorable demographic conditions for life insurance market development in South West Nigeria. It recommends that life insurers develop urban-targeted products with digital distribution channels to capture the growing urban middle-class insurance demand in the Southwest.

Keywords: urbanization, life expectancy, insurance demand, South West Nigeria, mortality improvement.