Insurance Investment and Real Sector of the Economy in Nigeria, 1996-2020. Co-Integration and Error Correction Model Approach

This study examined the insurance investment and real sector of the economy in Nigeria from 1996 – 2020. The major objective of the study is to examine the cointegration and error correction of insurance investment on the government securities, insurance investment on the stocks and bonds, insurance investment on the bill of exchange and insurance investment real estate and mortgage on real sector of the economy represented by real gross domestic product in Nigeria. The study employed auto regressive distributed lag model using data extracted from CBN statistical bulletin over the period of 1996-2020 via cointegration and error correction estimates. Result reveals that insurance investments on government securities, Insurance Investments on stocks and bond, insurance investment in real estate and mortgage and insurance investments on bill of exchange all had positive and significant impact on have positive and non-significant impact on real sector of the economy in Nigeria; Also, there existed cointegration relationship among the variables of interest which lead to error correction model It was clear that the error emanating from departure in equilibrium can be corrected over time The result specifically lead to conclusion that a there are rational relationship between the insurance investment and real sector of the economy both in the short run and long run which will bring increase in growth of financial institution and boost the economic development of Nigeria. The study recommended that investor should improve their investment on insurance bonds, stock, security and policy loan, it was further recommended that there should be a means of educating the masses and organization on insurance as an investing financial institution not just for life and property protection. The above recommendation will result to more insurance deepening and economic development in Nigeria as an implication.