Insurance Business: A Panacea for Agricultural Sector Sustainability in Nigeria (Published)
Insurance sector plays important role in the growth of Nigeria economy as well as agricultural sector. The study investigated the impact of insurance business on the growth of agricultural sector in Nigeria, using time series data for 18 years from 2000 to 2017, the data used were total insurance investment; total non-life insurance premium (Independent) and the agricultural sector output to Gross Domestic Product (Dependent) which was obtained from central bank of Nigeria (CBN) statistical bulletin and also National insurance commission (NAICOM) statistical bulletin. OLS regression was conducted as well as Augmented Dickey Fuller unit root test which reveals that all the variables are stationary at the order of one, the test for cointegration shows that all the variables cointegrate when AGDP is the endogenous variable. The granger causality test reveals that there is a bidirectional relationship existing between AGDP and total non-life insurance premiums, while unidirectional relationship exists between AGDP and total life insurance premiums with no causal relationship existing between AGDP and total insurance investments. The regression result shows that all the variables have significant impact on agricultural output to gross domestic product and also there is a positive relationship between all the predictors and agricultural output to GDP. It was therefore concluded that insurance serve as a remedy to the sustainability of agricultural sector in Nigeria. The study therefore recommends that insurance sector should provide adequate information particularly on the risk concerning agricultural sectors and also providing a maximum coverage for farmers and their products to reduce the risk which the farmers retained or being expose to in the sector.
Keywords: Agriculture, Gross Domestic Product, Insurance, Investment, Life Insurance, general insurance