ABSTRACT
This work examined the contributions of the insurance industry to the gross domestic product (GDP) in Nigeria. Data for the study were basically through the secondary process, extracted from journals, newspapers, internet, magazines, textbooks, CBN statistical Bulletin and Statement of Account etc. The Ordinary Least Square technique was used to test the validity of the hypotheses stated in the study. The research revealed that insurance industry through her routine activities has contributed significantly to economic growth of Nigeria. Through the signs from a priori expectation, it revealed a positive linear relationship between insurance contributions with gross domestic product (GDP) in Nigeria. However, the study revealed a negative relationship between total investments of insurance industry to gross domestic product. This is due the negligence of investment in the industry. Furthermore, the study exposed that neglect of laws governing insurance practise in Nigeria, poor accounting practice, poor claims settlement, failed public image, negligence of investment, low awareness of insurance etc as the major problems of the industry. The researcher recommended an increased supervisory role of NAICOM (National insurance commission), prompt payment of premiums, effective utilisation of insurance funds, research, improved public awareness through adverts and campaigns as possible solutions to the challenges facing the industry.
CHAPTER ONE
1.0 INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Insurance is a course of productive that enhances the quality of life and ensures the development and survival of all other businesses in general. The main purpose of insurance apart from its basic function is to enhance National development through effective wealth creation, protection and conservation.
In the view of this, Oshinloye et al (2009), shows that the important of insurance to any Nations economy cannot be undermined. He said that no country can experience a meaningful development without the presence of formidable insurance industry, thereby making insurance business in any nation indispensable irrespective of its quota to the gross domestic product (GDP) or its level of awareness among the populace. According to Ezirim and Muoghahu (2002), in a typical market economy of the globe the insurance industry is perceived as an indispensable tool of economic progress, growth and development. It is seen as vital to the well-being of and smooth functioning of a modern economy. Like most financial institutions, is seems as a conduct for mobilizing monetary from the surplus economy agents and channelizing them to more efficient uses.
Oba (2003) wrote that, the performance of the insurance sub- sector is a function of a social economic and political environment in which it operates. In fact, the state of the insurance industry of a country is a reflection of its economy. Insurance remains one of the....
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