ABSTRACT
This paper is an empirical investigation
into the relationship between insurance companies’ premium and gross
fixed capital formation (GFCF) in Nigeria and specifically how the
latter responds to stimuli emanating from the insurance companies. Data
were collected from CBN statistical bulletin from 1993-2013 while
regression statistical model was used for estimating and analyzing the
variables involved. The results revealed that the insurance industry
premium insignificantly correlate with Gross Fixed Capital Formation.
Some Empirical findings also showed that there is a low insurance market
activity in Nigeria and that Nigerians have not fully embrace the
insurance industry despite its importance to the growth of the economy.
This means that insurance premium is not invested in productive sectors
in the economy, thereby making economic growth minimal and thus capital
formation. Based on the findings, the paper therefore recommends the
formulation and implementation of policy measures that will increase
insurance penetration, improve insurance fund mobilization and enlarge
the insurance market in the Nigerian economy.