TITLE PAGE……………………………………………………………….i

APPROVAL PAGE…………………………………………………………ii

DEDICATION……………………………………………………………..iii

ACKNOWLEDGEMENT………………………………………………….iv

ABSTRACT…………………………………………………………………v

TABLE OF CONTENT…………………………………………………….vi

Chapter ONE

1.1  Background of the study………………………………………….1

1.2  Statement of the problem…………………………………………..3

1.3 Objective of the study……………………………………………………………………… 5

1.4  Research hypotheses……………………………………………….6

1.5  Significance of the study……………………………………………7

1.6  Scope and limitations of the study…………………………………7

Chapter TWO

2.0 Literature Review: Introduction

2.1 Theoretical literature

2.1.2 The Evolution of modern Insurance Business in Nigeria….. 9

2.1.3 Concept of insurance business……………………………..11

2.1.4 Classification of insurance Business……………………………………. 13

2.1.5  The mechanism of insurance……………………………….14

2.1.6  The insurance industry and Nigerian Economy…………..15

2.1.7  The investment case for the insurance sector………………16

2.1.7.1 Key factors for prospects in the industry………………………… 17

2.1.7.2 Real sector growth………………………………………………………………. 18

2.1.7.3 Implications of government legislation……………………………… 18

2.1.8  Evolution of capital requirements in the insurance sector…20 2.1.8.1 Pre-recapitalisation/consolidation………………………….21

2.1.9  Contributions of insurance to the gross domestic product in

Nigeria……………………………………………………………………………………. 22

2.1.10The insurance industry in Nigeria and the Financial Strategy (FSS) 2020…

………………………………………………27

2.1.10.1 Intended position of the industry……………………………………… 28

2.1.10.2 The way forward…………………………………………………………………. 29

2.1.10.3 The code of ethics…………………………………………..30

2.2  Empirical literature……………………………………………31

2.3  Limitations of the previous studies……………………………38

Chapter THREE

3.0 Research Methodology ………………………………………………39

3.1  Model specification…………………………………………40

3.2  Method of Evaluation………………………………………41 3.2.1 Evaluation Based on statistical criteria……………………42 3.2.2.1 Coefficient of multiple Determinations (R2)……………42 3.2.3 Evaluation Based on Econometric criteria…………………42

3.3  Co-integration and Error Correlation representation……44

3.4  Justification of the model……………………………………45

3.5  Data required and sources…………………………………..45

Chapter FOUR

4.0  Presentation and interpretation …………………………………..47

4.1  Unit root test…………………………………………………47 4.1.1 Co-integration Test…………………………………………48

4.2  Presentation of regression result……………………………..49

4.3  Economic a priori criteria…………………………………..50

4.3.1 Statistical criteria (first order test)……………………….51

4.3.1.1 Coefficient of multiple determinations (R2)

’                ……………………………………

4.3.1.2 The student s t –test                                                                 .51

4.3.1.3 F –Statistics……………………………………………..53

4.3.2 Econometric criteria (second order test)…………………54

9

4.3.2.1 Test for Autocorrelation…………………………………..54

4.3.2.2 Normality Test for Residual………………………………………………. 55

4.3.2.4 Test for multicollinearity…………………………………57

4.4 Policy implications……………………………………………58

Chapter FIVE

5.0  Summary of the findings, Recommendations and conclusion

5.1  Introduction………………………………………………….60

5.2