A CORRELATION STUDY BETWEEN GDP AND INSURANCE PENETRATION

ABSTRACT This study investigated the correlation between insurance penetration and economic growth in Nigeria over the period 2012–2021. The research aimed to assess the relationship between gross insurance premiums, insurance penetration rate, and premium per capita with Nigeria’s Gross Domestic Product (GDP). Secondary data were obtained from the Central Bank of Nigeria (CBN), the National Insurance Commission (NAICOM), and the National Bureau of Statistics (NBS). Descriptive, correlation, and regression analyses were employed to determine the strength and direction of the relationships among variables. The findings revealed that gross insurance premium income is highly correlated with GDP (R = 0.852, p < 0.05), explaining approximately 72.7% of variations in Nigeria’s economic performance. Premium per capita also exhibited a strong and positive influence on GDP (R = 0.775, p = 0.008), while insurance penetration rate showed a statistically significant but negative correlation with real GDP growth (r = –0.672, p = 0.033). Overall, the results indicate that insurance sector activities contribute positively to economic growth, though the penetration level remains below 1% of GDP, reflecting the sector’s underdevelopment. The study concludes that enhancing insurance penetration can significantly strengthen Nigeria’s economic resilience. It recommends improved public awareness, product innovation, regulatory reforms, technological adoption, and macroeconomic stability to foster deeper insurance market development and sustainable economic growth.