Determinants of Insurance Penetration in Nigeria: An Empirical Investigation of Digital Infrastructure Indicators Using the Autoregressive Distributed Lag Model

This paper empirically examines the factors that influence insurance penetration in Nigeria with particular emphasis on the digital system indicators, spanning the period 1Q2010 to 4Q2025. It quantifies three explanatory factors using data from quarterly surveys conducted by NAICOM, NCC, CBN, World Bank and ITU: accessibility of electronic insurance gateways (DIPA), mobile internet coverage (MIP), and the presence of the smartphone devices (SMU). By implementing an ex post facto methodology with the bounds testing framework and the ARDL model of error correction, the research includes both transient and permanent relationships. A long run cointegrating nexus is revealed by the bounds procedure. The error correction outputs indicate that the effects are mixed, with MIP contributing positively and statistically significantly in the short term, DIPA having a small, non-significant impact, and SMU having a large negative impact in the short term. The negative error correction coefficient is statistically significant and indicates that the system will rapidly return to equilibrium after disturbances. Robustness checks confirm the robustness of the estimated model. Overall, the study finds that the variables related to digital infrastructure have a complex influence on penetration, with mobile broadband as the main driver and platforms and smartphones alone being insufficient if not backed by further investments in digital education, consumer enlightenment and building relationships. The paper calls for expansion of wireless broadband networks, improving ease of use of platforms and implementing educational outreach and strengthening programmes to increase insurance uptake in Nigeria