INSURANCE MARKET DEVELOPMENT AND FINANCIAL STABILITY

Admin/ November 3, 2018/ Journal of Business and Social science/ 0 comments

INSURANCE MARKET DEVELOPMENT AND FINANCIAL STABILITY

Peters O. & 2EHIOGU, Chizoba P.
1. Department of Banking and Finance, Imo State University Owerri, Nigeria
2. Department of Insurance and Actuarial Sciences, Imo State University Owerri, Nigeria

Abstract

This study investigated the relationship between insurance sector development and financial stability in Nigeria for the period 1981 to 2016. The study employed ex post factor research design while data was collected through secondary sources. The study applied the Philip Ouliaris residual based cointegration test, to test the null hypothesis that there is no long run relationship between insurance sector development and financial stability in Nigeria. The estimated Philip-Ouliaris cointegration test (tau-statistic and normalized autocorrelation coefficient – the z-statistic) fail to reject the null hypothesis at the 5% level of significance suggesting that there is no long run relationship between Insurance sector development and financial stability in Nigeria. Given the finding of this study, the researchers concluded that there is no long run relationship between Insurance sector development and financial stability in Nigeria and recommended that both the Government and Insurance Operators in conjunction with the Insurance regulatory authorities re-examine their strategies at fulfilling the objectives which the Insurance sector abnitio were set to achieve, that is, risk management and stable financial environment.

Keywords: Insurance, Development, Financial, Stability, Co-integration

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