Effects of Selected Macroeconomic Variables on Insurance Claims Settlement in Nigeria

Main Article Content

Agbo, Ishmael Umunnakwe
Eze, Juliet Obageli
James Leekaaga Fiiwe (PhD)

Abstract

The study examined the effect of selected macroeconomic variables, specifically inflation and interest rate, on insurance claims settlement in Nigeria. The research adopted an ex-post facto design, and data were analyzed using the Auto-Regressive Distributed Lag (ARDL) model. The results indicate that both inflation and interest rate have a positive but insignificant effect on claims, with p-values of 0.0655 (p > 0.05) and 0.3068 (p > 0.05), respectively. Therefore, we conclude that while both predictors (inflation and interest rate) are positively associated with the dependent variable, their effect is not substantial. This could mean that other factors are overshadowing the influence of macroeconomic variables, rendering them less impactful in the context of insurance claims. More so, the findings propose that insurers might experience a greater influence on claims management from internal factors rather than external economic conditions. This highlights the importance of examining the operational practices and regulatory frameworks within which insurers operate. Insurers' risk management strategies; such as underwriting processes, claims handling procedures, and reserves management; are crucial in determining their ability to settle claims effectively. A well-implemented risk management framework can mitigate potential losses regardless of macroeconomic fluctuations. We recommend implementing predictable and sustainable economic policies, as well as maintaining low interest rates to motivate investors.

Keywords: Insurance Claims Settlement, Macroeconomic Variables, Inflation, Interest Rate, Nigeria

Article Details

Agbo, I. U., Eze, J. O., & James, L. F. (2024). Effects of Selected Macroeconomic Variables on Insurance Claims Settlement in Nigeria. African Journal of Management and Business Research, 16(1), 151-169. https://doi.org/10.62154/ajmbr.2024.016.010411
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Copyright (c) 2024 Agbo, Ishmael Umunnakwe, Eze, Juliet Obageli, James Leekaaga Fiiwe (PhD) (Author)

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Agbo, Ishmael Umunnakwe, Enugu State University of Science and Technology (ESUT), Enugu, Enugu State, Nigeria.

Department of Insurance and Risk Management,

Faculty of Management Sciences,

Enugu State University of Science and Technology (ESUT), Enugu, Enugu State, Nigeria. 

Eze, Juliet Obageli, Enugu State University of Science and Technology (ESUT), Enugu, Enugu State, Nigeria. 

Department of Insurance and Risk Management,

Faculty of Management Sciences,

Enugu State University of Science and Technology (ESUT), Enugu, Enugu State, Nigeria. 

James Leekaaga Fiiwe (PhD), Kenule Beeson Saro Wiwa Polytechnic, Bori, Nigeria.

Department of Insurance,

Kenule Beeson Saro Wiwa Polytechnic, Bori, Nigeria.

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