The Relationship Between Insurance Sector Development and Economic Resilience in Nigeria

This study investigates the relationship between insurance sector development and Nigeria's macroeconomic resilience to external shocks over the period 2000 to 2023. Economic resilience, defined as the capacity to absorb, adapt to, and recover from economic disruptions, has received renewed attention following the COVID-19 pandemic, oil price collapses, and currency crises experienced by Nigeria in recent years. Insurance sector development, measured by premium penetration, insurance density, and claims payment ratios, is theorized to enhance economic resilience by facilitating rapid recovery from insured losses and stabilizing household and corporate cash flows. This study employs a time series approach using annual aggregate data, testing the cointegration relationship between insurance sector development indicators and selected resilience proxies including real GDP volatility, current account adjustment speed, and private investment recovery rates following shock years. The Autoregressive Distributed Lag (ARDL) bounds testing procedure and error correction model are applied to establish long-run and short-run dynamic relationships. Preliminary findings are expected to identify a positive long-run relationship between insurance penetration and macroeconomic resilience, with premium penetration exerting the strongest effect. The research contributes to the macroeconomic role of insurance literature in the Nigerian context and recommends insurance sector development as a component of national economic resilience strategy. Keywords: Insurance Sector Development, Economic Resilience, Nigeria, ARDL, Macroeconomic Analysis.