INSURANCE PENETRATION

The study examines the determinants of insurance penetration rate in Nigeria. While several empirical studies have been done on this topic, few of the previous studies have focused on Nigeria. The specific objectives of the study were to ascertain the effect of inflation rate, education, income level and life expectancy on insurance penetration rate in Nigeria. Secondary data were extracted from the Central Bank of Nigeria Statistical Bulletin. The study adopted a multivariate OLS analysis for the estimation process and the data were regressed and analysed with the aid of Eviews 9.0 econometric software package. The findings of the study were that income level and life expectancy positively and significantly impacts insurance penetration in Nigeria while inflation rate and education were found not to be key factors that affect insurance penetration rate in Nigeria over the studied period. We therefore recommend that the current reforms in the insurance sector should be intensified so as to boost the development of these segments of the financial system and by that increase their penetration rate. Also, the government and the insurance industry should focus on increasing income levels and life expectancy in Nigeria as a way to increase insurance penetration. This could be done through policies that promote economic growth and improve life expectancy, such as investment in
education and health infrastructure. The government could also provide financial incentives to encourage insurance adoption, such as tax breaks for individuals who purchase insurance policies.