Volume 11 - Volume 11
Projecting Insurance Penetration Rate in Nigeria: An ARIMA Approach
Abstract
Insurance industries' market penetration level is revealed by the premiums paid as a proportion to
overall economic output. Nigeria's insurance penetration rate is 0.33 per cent despite its population
advantage of about 200 million people. This rate is far below the average African rate of 2.98 per
cent, and the lowest compared to some Sub-Sahara African countries like Kenya, Zimbabwe, Namibia
and South Africa. The paper uses annual data on insurance penetration (IP) for the period 1981 to
2018. Autoregressive Integrated Moving Average (ARIMA) model was used to projects the insurance
penetration rate for 12 years (2019 to 2030). The result shows that the insurance penetration rate
keeps decreasing but at a slower rate. The paper recommends that the national regulatory bodies of
insurance such as National Insurance Commission of Nigeria (NAICOM) should innovate and
implement policies. This action will pave ways for the insurers to design insurance coverage, which
will meet the specific needs of heterogeneous societies in order to spur insurance penetration rates.
Paper Details
PaperID: 1916
Author's Name: Usman Ahmed Hafiz, Fauzilah Salleh, Murtala Garba and Norfadzilah Rashid
Volume: Volume 11
Issues: Volume 11
Keywords: ARIMA Modelling, Forecasting, Premiums, Insurance Penetration.
Year: 2021
Month: May
Pages: 63-75