Effects of Fire Insurance on the Growth of Nigeria's Insurance Industry

Sunday Adekunle ADULOJU ADULOJU; Tajudeen Olalekan  YUSUF; Taiwo Olarinre OLUWALEYE

Sunday Adekunle ADULOJU Department of Actuarial Science & Insurance, University of Lagos, Nigeria
Tajudeen Olalekan YUSUF Department of Actuarial Science & Insurance, University of Lagos, Nigeria
Taiwo Olarinre OLUWALEYE Department of Finance (Insurance Unit), Faculty of Management Sciences, Ekiti State University, Ado- Ekiti, Nigeria

Keywords: Fire Insurance, Written Premium, Ceded Premium, Firm Growth

Abstract

This study assessed the effect of fire insurance on firms’ growth in Nigeria's insurance industry. Specifically, this study investigated the effect of fire insurance written premiums and fire insurance ceded premiums on the asset growth rate of selected insurance firms in Nigeria. Secondary data used in this study were obtained from the published business reports of ten insurance companies in Nigeria, covering the period from 2011 to 2022 and data were scrutinized using descriptive statistics and correlation analysis and panel regression estimation techniques. The result of the fixed effect model, based on Hausman verification, then showed that fire insurance written premium and fire insurance ceded premium exert a significant positive effect on asset growth rate. Therefore, this study established that fire insurance has a significant positive effect on the firm growth of the Nigerian insurance industry. Hereafter, the authors suggested that insurance firms should put in more effort to encourage, attract, and retain more clients in the area of fire insurance policy since this will help enhance their level of growth.