Abstract
The insurance sector provides financial protection for policyholders by pooling and investing premiums from which those who experience unforeseen losses are compensated. As a result, an efficient and timely claims settlement by insurance companies has been identified as a measure with the potential to boost the industry's growth and profitability. However, many insurance companies struggle to consistently improve their claims operations due to a poor claims process and unrecognized claims department staff, which Chief executive officers hinder their performance. This study examined the effect of Claim management practices and firm profitability of listed insurance companies in Nigeria. Survey research design was adopted. The target population of the study are the full-time top management employees of the listed insurance companies in Nigeria with a total population of 2183. Sample size of 776 was determined using Kerjcie and Morgan (1970). Proportionate stratified sampling technique was adopted. A validated questionnaire was used to collect data. Cronbach’s alpha reliability coefficients for the constructs ranged from 0.772 to 0.857. The response rate was 86.5%. Data were statistically analysed using descriptive and inferential statistics. Findings revealed that claims management practices have significant effect on profitability of the selected insurance companies in Lagos State Nigeria (Adj.R2 = 0.840; F (5, 655) = 695.900, p<0.05). 17.928, p < 0.05). The study concluded that Claims management practices dimensions have significant effect on firm profitability of listed insurance companies in Lagos State, Nigeria. The management of insurance companies in Nigeria should develop a policy to link claims management ancillaries and departments in order to make the sector profitable and sustainable in the long run. Such a policy would be the anchor of actions adopted by or proposed by the firms in matters pertaining to market dominance.
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