Measuring Effect of Selected Social-Economic Factors Responsible for Insurance Pentration in Africa, Evidence From Nigeria, 1996-2025

This study examines the effect of selected socio-economic factors on insurance penetration in Nigeria from 1996–2025. Insurance penetration, measured as the ratio of insurance premiums to Gross Domestic Product, serves as the dependent variable, while insurance claims, insurance investment, expanded credit to the private sector, and inflation rate constitute the independent variables. The study adopts an ex-post facto research design and utilizes secondary time-series data obtained from relevant financial and regulatory institutions. Econometric techniques such as unit root tests and Ordinary least square regression analysis are employed to examine the long-run relationship between the variables. The findings indicate that insurance claims and insurance investment exert a positive influence on insurance penetration by enhancing public confidence and strengthening the financial capacity of insurance firms. Expanded credit to the private sector also contributes positively by stimulating business activities that require risk protection. However, inflation rate shows a negative effect on insurance penetration as rising prices reduce the real value of insurance coverage and discourage long-term financial commitments. The study therefore concludes that socio-economic conditions play a crucial role in determining the level of insurance penetration in Nigeria. Policy makers and regulators such as the National Insurance Commission should strengthen regulatory oversight, encourage timely settlement of insurance claims, promote investment opportunities for insurers, and implement macroeconomic policies that reduce inflation. These measures will enhance public trust and improve insurance penetration in Nigeria and across Africa.