Globalisation and Insurance Sector Penetration: Macro Evidence from Nigeria

The impact of globalisation on the penetration of the insurance industry in Nigeria from 1987 to 2021 was investigated in this study using the distributed lag long-run estimating technique. The results from the use of KOF Globalisation index showed that globalisation promotes penetration of the insurance sector (Coeff =0.1388; p. value0.01). It furthered revealed that Insurance penetration rate rises with increased GDP per capita, population, and financial sector development. However, inflation reduces insurance penetration rate. Globalisation greatly aids in the penetration of the insurance sector in Nigeria which suggests the opening up of the Nigerian insurance market to foreign competition, lowering costs and increasing the efficiency of insurance services. The government also need to formulate appropriate policies to encourage the mobility of insurance products, services, and capital. Asides the aforementioned, insurers in Nigeria are encouraged to continuously offer globalised products that adhere to international standards to attract foreign consumers. Meanwhile, the dark sides of globalisation should be mitigated while introducing these new insurance services and products.