Evidence-Based Policy Evaluation: Focus on Micro-Insurance Operational Policy in Nigeria

Abstract

Purpose: This study assessed the impact of the implementation of micro-insurance operational policy, about a decade ago, on the insurance sector in Nigeria. Design/Methodology/Approach: Annual insurance industry level data for the period 2004 to 2021, disaggregated into pre and post the micro-insurance implementation eras in Nigeria, was used for the study. A non-parametric model, Mann-Whitney U test, was used in the analysis to ascertain the significant difference in the insurance penetration rate and total gross premium before and after the implementation of the micro-insurance operational policy in Nigeria. Findings: The results indicated that the insurance penetration rate was statistically significantly different between the two periods and the total gross premium of the insurance sector in Nigeria was not statistically significantly different between the two periods. The results suggest that the implementation of the micro-insurance operational policy had a significant impact on the insurance penetration rate and not on the total gross premium of insurance sector in Nigeria. Practical Implications: These findings suggest the need to design micro-insurance products that align with the socio-economic characteristics of the target market in different regions in Nigeria as well as innovate ways to ease payment of premium by micro-insurance clients. Overall, important recommendations to inform practice and future policy for effectiveness of the micro-insurance market in Nigeria are raised in the study. Originality/Value: This study is unique as it is an evaluation of an industry based policy with a potential to influence policy adjustment to inform efficiency in practice.