Budgetary Control and Financial Performance of Insurance Companies in Nigeria

Abstract

Huge economic degradation in 2016, drastic fall in oil price made Nigeria's export sector under a thread. The continuous increase in population made both life and non-life insurers a very important product or service in their lifestyle. This creates a golden opportunity for insurance business. To sustain any business, good budgetary controls practices need to ensured. It improves the financial performance. A descriptive study has been used on 230 managerial workers drawn from 15 insurance companies listed by NSE as at 2018. Audited financial statements have been used to collect many important and relevant variables. This study explores the importance of budgetary control. Through data analysis using SPSS version 16.0, Correlation, and multiple regression analysis as well as bar graph were used to obtain the result. The study recommends that effective budget implementation should be facilitated through capacity building, robust systems and processes prioritization, and close monitoring for evaluation. Stakeholders should get involved in budget execution to enhancing the overall budget implementation. Further, financial management systems should be supported in order to ensure prudent management of funds and adequate sensitization of both the employees and the public on best financial management practices to enhance the oversight role.