Effect of Commercial General Liability Insurance on Insurance Market Development in Nigeria

Macauley Chrysantus Martin; Edidiong Justine John; Oto-obong Udom Udo; Wisdom Etiemana Peter

doi:10.56201/ijefm.v10.no11.2025.pg32.43

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Effect of Commercial General Liability Insurance on Insurance Market Development in Nigeria

Macauley Chrysantus Martin; Edidiong Justine John; Oto-obong Udom Udo; Wisdom Etiemana Peter

Abstract

The Nigerian insurance sector faces persistent challenges with low market penetration, currently stagnating at less than 1% of GDP, despite the critical role of Commercial General Liability Insurance in mitigating business risks and fostering economic stability. While premium income and claims settlement efficiency are widely regarded as key drivers of insurance adoption, their actual impact on market penetration remains empirically underexplored in Nigeria. This study investigates the effect of Commercial General Liability Insurance on insurance market development in Nigeria. Using ex-post facto and descriptive research designs, the study analyzed secondary data from 2012 to 2023 sourced from the Central Bank of Nigeria, World Bank, and NAICOM. Ordinary Least Squares (OLS) regression was employed to test the hypotheses. The findings revealed that premium income from CGLI had a non-significant negative effect on market penetration (Coeff. = -0.000000724, p = 0.2124), while claims settlement efficiency showed a non-significant positive relationship (Coeff. = 6.270190, p = 0.2163). The study concluded that isolated improvements in premium pricing or claims processing are insufficient to expand market penetration. Instead, holistic strategies integrating consumer education, regulatory reforms, and innovative product design are needed to address underlying barriers. It was also recommended that regulatory bodies and insurance firms should collaborate to design policies and products that align with consumer needs and Nigeria’s economic realities for enhanced market development.

Keywords

Commercial General Liability Insurancemarket penetrationpremium income

References

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Effect of Commercial General Liability Insurance on Insurance Market Development in Nigeria

Abstract

Keywords

References

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