INSURANCE INTERMEDIATION AND AGRICULTURAL OUTPUT IN NIGERIA
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Date
2024
Journal Title
Journal ISSN
Volume Title
Publisher
Ilorin Journal of Finance
Abstract
Effective insurance intermediation is an essential financial instrument intended to reduce risks, especially
in an industry like agriculture that is thought to be extremely volatile. Nigerian agricultural output is
threatened by a number of risks, such as market volatility, pest infestations, and climate change, despite
the efforts of the country's insurance companies. In light of this, this study looked at how insurance
intermediation affected Nigerian agricultural production. Financial records from the Nigerian
Agricultural Insurance Corporation and the Central Bank of Nigeria Statistical Bulletin provided time
series data from 2005 to 2021. The data was analysed using Ordinary Least Square (OLS) regression as
an estimation technique. According to the study, the assets of insurance companies (ICA) have no effect
on crop output or fishing (coeffs. 3.16 & -4.89; p-values 0.43 & 0.90), but they have a considerable
impact on agriculture, livestock, and forestry (coeffs.7.52, 1.62, and 8.67; p-values 0.00, 0.00, and 0.00).
Additionally, all forms of agriculture are unaffected by Agricultural Insurance Premiums (AIP)
(coeffs.1.92, 8.78, -3.92, -4.41 & 3.23; p-values 0.43, 0.78, 0.61, 0.19 & 0.80).According to the study's
findings, ICA has an impact on agriculture, livestock, and forestry but no influence on crop production or
fishing. Not all forms of Nigerian agriculture are impacted by AIP. According to this study, the Federal
Government should establish beneficial policies for its agencies, such as the Nigerian Agricultural
Insurance Corporation (NAIC), in order to encourage ICA to enhance other agricultural sub-outputs in
Nigeria, such as crop production and fishing. In order to influence all agricultural varieties, which will
then translate into their contributions to Nigeria's GDP, NAIC must constantly make sure that insurance
premiums are reinvested in the agricultural sector.