Numerical Evaluation of Adverse Effects of Economic Fluctuations on the Investment Returns of Insurance Industry in Nigeria

Abstract

The investment landscape in Nigeria is inherently influenced by economic fluctuations that pose substantial challenges and opportunities for investors and policyholders. This paper aims to investigate and provide solutions to the adverse effects of economic fluctuations on the investment returns of Insurance Industry in Nigeria through a numerical evaluation. These adverse effects are capable of resulting into future delay and volatility-noise of economic fluctuations in the financial market which influences the investment returns of Insurance Industry. These adverse effects are modeled as Advanced Stochastic Time-Delay Differential Equation (ASTDDE). The modeled equation is solved using a two-step Hybrid Block Adams Moulton Methods (2HBAMM) with the help of new sequence for delay and noise terms computations. Numerically, through mathematical demonstration, these adverse effects are expressed in form of some examples of Advanced Stochastic Time-Delay Differential Equation (ASTDDE) and were solved using the proposed method which revealed its financial and economic implications.