AN ASSESSMENT OF THE CONTRIBUTION OF THE INSURANCE INDUSTRY TO ECONOMIC DEVELOPMENT IN NIGERIA

This paper critically looks at how the insurance industry has contributed to the economic development of Nigeria with special focus on the Ilorin branch of the Sterling Assurance plc located in Kwara State. Using a descriptive research design, the data were collected using a structured questionnaire, which was given to 150 respondents (including policyholders, employees, and informal business stakeholders) and 135 valid responses to the questionnaire were analyzed with the help of the SPSS version 28. The empirical data show that insurance significantly encourages local economic growth by the fact that 76.3 0.0% of the respondents confirmed its role in minimizing exposure to economic shocks, 74.8 0.0% confirmed that it boosts business investment, 70.4 0.0% confirmed that it increases financial resilience at the household level, 68.1 0.0% confirmed its role in employment generation and 62.2 0.0% confirmed its role in capital formation. The results of the regression analysis indicate that there is a strong statistically significant correlation between insurance activities and economic development (R 2 = 0.732, p = 0.000) thus, allowing the null hypothesis to be rejected. However, there exist some critical issues that limit the potential of the sector, the most significant ones being the lack of awareness of the population about it (82.2 %), the ineffective implementation of obligatory insurance laws (75.6 %), the general mistrust in claims settlement processes (68.9 %), high premiums (61.5 %), the lack of product innovations (58.5 %), and the absence of digital infrastructure (52.6 %). It is interesting to note that 71.9% of the respondents trusted the claims handling methods of Sterling Assurance, which makes it seem that the credible delivery of services by individual companies can help the industry overcome the wider credibility issues. Finally, the paper confirms that insurance is an effective driver of inclusive and sustainable economic growth in Nigeria, but its effectiveness depends on extensive policy changes, a focused social awareness campaign, strict regulatory compliance, and investment in the digital infrastructure. Based on this, policymakers, insurers, industry organizations, and educational establishments are recommended to supplement the developmental role of the sector at the national and sub-national levels.