Effects of Selected Macroeconomic Variables on Insurance Claims Settlement in Nigeria

The study examined the effect of selected macroeconomic variables, specifically inflation and interest rate, on insurance claims settlement in Nigeria. The research adopted an ex-post facto design, and data were analyzed using the Auto-Regressive Distributed Lag (ARDL) model. The results indicate that both inflation and interest rate have a positive but insignificant effect on claims, with p-values of 0.0655 (p > 0.05) and 0.3068 (p > 0.05), respectively. Therefore, we conclude that while both predictors (inflation and interest rate) are positively associated with the dependent variable, their effect is not substantial. This could mean that other factors are overshadowing the influence of macroeconomic variables, rendering them less impactful in the context of insurance claims. More so, the findings propose that insurers might experience a greater influence on claims management from internal factors rather than external economic conditions. This highlights the importance of examining the operational practices and regulatory frameworks within which insurers operate. Insurers' risk management strategies; such as underwriting processes, claims handling procedures, and reserves management; are crucial in determining their ability to settle claims effectively. A well-implemented risk management framework can mitigate potential losses regardless of macroeconomic fluctuations. We recommend implementing predictable and sustainable economic policies, as well as maintaining low interest rates to motivate investors.