Marine and Aviation Insurance and its Effect on the Growth of the Nigerian Economy

Abstract

This study investigates the relationship between marine and aviation insurance and the growth of the Nigerian economy from 1998 to 2023. Using an ex-post facto research design, the study analyzed time-series data obtained from credible sources such as the Central Bank of Nigeria (CBN), Insurance Digest, and National Insurance Commission (NAICOM). The research aimed to examine the effects of Marine and Aviation Gross Premium, Net Premium, Gross Claims Paid, and Net Claims Paid on economic growth. The study employed statistical tools such as Descriptive Statistics, Augmented Dickey-Fuller Unit Root Test, Auto-Regressive Distributed Lag (ARDL) Bound Test, and the Short-run Error Correction Model (ECM). Post-estimation tests, including the Correlogram Squared Test and Breusch-Godfrey Serial Correlation LM Test, were conducted to assess model stability. The findings revealed that Marine and Aviation Gross Premium negatively and significantly impacted economic growth, whereas Marine and Aviation Net Premium had a positive and significant effect. On the other hand, Gross Claims Paid had a negative but insignificant effect, while Net Claims Paid showed a positive yet insignificant effect on the economy. The study concluded that while past economic performance influences current growth, the effects of insurance premiums on economic growth are mixed. Claims, both gross and net, did not significantly impact economic growth in the short run. The findings align with prior research, highlighting the importance of regulatory improvements, enhanced insurance penetration, and operational efficiency to fully exploit the economic potential of marine and aviation insurance in Nigeria. The study recommends strengthening premium regulations, improving net premiums through flexible products and awareness campaigns, enhancing claims management through digital platforms, and addressing low insurance penetration with government interventions.