Financial Intermediation Activities and Output: Econometrics Evidence from Insurance intermediation in Nigeria, 1997-2022

• Post by: airjournal
• September 7, 2022
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Financial intermediation is an entity that involves bringing the surplus sector with the deficit sector for financial transactions, such as commercial bank insurance companies, investment banks, mutual funds, or pension funds. Financial intermediaries offer several benefits to the average consumer, including safety, liquidity, and economies of scale involved in banking and asset management. The broad objective of the study is to examine the impact of financial intermediation activities and output:  econometrics evidence from insurance intermediation in Nigeria, 1997-2022. The specific objective of this study is to examine the impact of insurance investment on the Nigerian economy, and the impact of insurance assets and insurance premiums on the Nigerian economy. The ordinary least square model was adopted for this study because the variables are all stationary at level one. Total insurance assets have a positive (0.06) percent and nonsignificant (0.11>0.05) percent impact on real gross domestic product. Total insurance investments have a positive (0.08) percent and nonsignificant (0.09>0.05) percent impact on real gross domestic product. Total insurance premium has a positive (0.20) percent and significant (0.0015<0.05) percent impact on real gross domestic product respectively. Financial system and Insurance intermediation help to provide growth in the financial outlet, development in money and capital market, and increase in the level of insurance indemnification of policyholders in the event of loss and finally engender economic growth. The following are the recommendations. Government should endeavor to regulate the activities of exchange rate fluctuations so as to enhance a suitable environment where insurance intermediation will thrive and help to drive the returns on insurance assets. Financial development such as an increase in brood money supply and sectional allocation of commercial bank credit to the private sectors will be encouraged so as to increase the financial performance of insurance premium intermediation in Nigeria. Monetary authorities should endeavor to combat constructively the effect of inflation and regulate the inflation rate so that private sectors will patronize insurance sector policies effectively to improve the level of insurance investment

Keywords: Financial Intermediation Activities; Insurance Intermediation; Econometrics

Authorship: Ezema, C. PhD, Ugwu, N., Ojo, M., Aroh, M., Udeji, B. & Idigo, J. | FULL PDF