Demographics and Insurance Market Development in Nigeria

Insurance market development is often measured in terms of penetrationwhich may depend on the prevailing demographics like life expectancy, fertility rate,income distribution and dependency ratios. Many of these demographics emerge ascohorts to savings and insurance behaviors. The matured economies are configuringdevelopment in terms of longevity risks as compared with developing economiesthat faces higher dependency ratios, lower life expectancy and high fertility rates andactive young population but with high unemployment, morbidity rate, mortality ratepoor Gini co-efficient. This paper adds to the literature on the implications of emergingdemographics on Nigeria’s insurance market development debacle. Using multipleregression technique, the level of causal relationship of insurance market developmentis tested on mortality rate, fertility rate, dependency ratio, unemployment rate, andGini co-efficient. It is found out that insurance market development in both life andgeneral insurance sectors is significantly negative to the explanatory variables. Thestudy suggests that policy on health and education expenditure should be increasedto mitigate high morbidity and mortality risks as well as generating employmentopportunities in other to sustain savings and insurance culture.