The Relationship Between Insurance Density and Economic Growth in Nigeria: A Regional Analysis

This study examines the relationship between insurance density, defined as per capita insurance premium expenditure, and economic growth across Nigeria's six geopolitical zones for the period 2013 to 2023. Insurance is widely recognized as a mechanism for risk transfer, loss mitigation, and long-term savings mobilization, all of which contribute to economic development. However, Nigeria's aggregate insurance density is among the lowest in Africa, and significant regional disparities exist due to income differences, literacy levels, and varying risk cultures. This study uses secondary data from NAICOM statistical reports, the National Bureau of Statistics, and the Central Bank of Nigeria. Zone-level insurance density is regressed against real GDP growth, poverty headcount, and financial inclusion indicators using panel data methods. Fixed effects and random effects estimators are compared. Findings reveal a significant positive relationship between insurance density and regional economic growth, with the South West and South South zones driving the national correlation. The North West and North East zones show the lowest insurance density and weakest growth linkages. Financial inclusion levels emerge as a significant moderating variable. The study concludes that expanding insurance penetration, particularly in underserved northern zones, could meaningfully contribute to regional economic development. It recommends that NAICOM and the CBN coordinate financial inclusion initiatives to integrate insurance access into the broader financial sector deepening agenda for underserved zones.

Keywords: insurance density, economic growth, regional analysis, Nigeria, financial inclusion.