Fire Risk Transfer and the Nigerian Economy (1999-2019)

Abstract

This study was conducted to assess fire risk transfer and its impact on the Nigerian economy over the period 1999 to 2019. It was borne out of the incessant fire outbreaks in the country in recent times which has led to an increase in fire risk premiums in the Nigerian insurance industry. The specific objectives were to investigate the trend of fire risk premium and real gross domestic product (RGDP) and assess the impact of fire risk premium on RGDP in Nigeria. The ex-post facto research design was adopted and the population consisted of all insurance companies covering fire risk as of 2019. Data were sourced from Nigeria Insurance Digest, the Central Bank of Nigeria statistical bulletin and the National Bureau of Statistics covering the selected years. The dependent variable for the study was RGDP while fire risk premium, exchange rate and money supply were independent variables. The trend analysis revealed that fire risk premiums increased at a faster rate than RGDP. while the regression analysis indicated a positive significant relationship between fire risk premiums and RGDP, and negative relationships between exchange rate and RGDP, as well as between money supply and RGDP. It was recommended that fire risk transfer should be encouraged for individuals and organizations to enhance its continued contribution to economic growth.