INSURANCE AS A TOOL FOR FINANCIAL STABILITY IN A DEVELOPING ECONOMY

Abstract

This paper examined the stabilising role of insurance in an emerging economy, focusing on Jos North Local Government Area of Plateau State, Nigeria. Using a questionnaire-led case study supported by semi-structured follow-up interviews, the study investigated how insurance awareness, affordability, trust, claims experience, and confidence in regulation influenced the use of insurance as a buffer against financial instability. Evidence from the Nigerian insurance market bulletin, global financial inclusion literature, and published Nigerian studies on insurance awareness, penetration, trust, and communication was also reviewed to contextualise the findings. Quantitative data were analysed using descriptive statistics, cross-tabulation, chi-square tests, and multiple regression, while interview responses were analysed thematically. The findings showed that insurance contributed to financial stability by helping households manage shocks, protect consumption, and support business continuity. However, its effectiveness was constrained by low awareness, affordability challenges, weak trust, poor claims experience, and limited confidence in regulatory institutions. The study concluded that although insurance has clear stabilising potential in Jos North, stronger public awareness, improved claims handling, more affordable products, and greater regulatory credibility are necessary to deepen its buffering role against financial instability.