Effect of Insurance Business on Financial Development in Nigeria (1996–2016)

This study was on effect of insurance business on financial development in Nigeria. The specific objectives of the study were to examine the extent to which total insurance investment positively affects Stock market capitalization to GDP, Credit to Private sector to GDP and Liquid assets to deposits and short term funding in Nigeria. Ordinary least square regression was used as analytical technique. It was found thattotal insurance investment has positive and no significant effect on Stock market capitalization to GDP; total insurance investment has positive and no significant effect on credit to private sector; and total insurance investment has positive and no significant effect on Liquid assets to deposits and short term funding.Based on the findings of the study it is concluded that despite the increasing volume of investments made by the insurance industry in the Nigerian economy there has not been a commensurate significant effect on the depth of financial development in the country. Therefore, it is recommended that the insurance industry needs to widen the spread of its investments in financial instruments; through its Life policies more policy loans should be used to advance loans to the private sector; and added efficiency in claims settlement through adoption of global insuretech best practices will improve the industry's capacity to stabilize the financial position of individuals and firms on short term.