Insurance Companies In Nigeria Research Articles

Board diversity and earnings’ quality of the listed insurance companies in Nigeria

This study examines the relationship between board diversity (in term of percentage of female board members, educational qualification, independent directors, interlocking directorship, and financial literacy) and earnings quality of listed insurance companies in Nigeria. The study used secondary data from the stock exchange fact books and audited financial statements of the selected companies. We adopted a quantitative research design in which data were analyzed using descriptive and inferential statistics. Three variants of regression model, namely pooled ordinary least square, fixed effects and random effects models were estimated. Results revealed that significant differences exist in board diversity and earnings quality across the listed insurance companies in Nigeria. Also, the impact of board diversity on earnings quality is positive and strong. That is, the higher the company’s board diversity the better the ability to generate quality earnings. The results suggest than insurance companies with large number of women on the board are more likely to generate higher quality earning than those dominated by men. The paper draws the attention of management of listed insurance companies to the need to comply with the code of corporate governance on board diversity to increase the number of women on the board and ensure that the board consists of educationally qualified members, and financial literate members. The study also draws the attention of Nigeria Stock Exchange Group (NSGG) and other regulatory authorities to the need for regulation that will make disclosure of directors’ personal information a regulatory disclosure.

Sustainability reporting and market performance of listed Insurance Firms in Nigeria

Purpose: This study examines the effect of sustainability reporting on the market performance of listed insurance firms in Nigeria. Methodology/approach: The study employed an ex-post facto research methodology, using pre-existing, unaltered data from 22 listed Nigerian insurance companies, selected through census sampling. Conducted from 2013 to 2023, the study period covers the transition from the Nigerian Stock Exchange (NSE) to the Nigerian Exchange Group (NGX). Panel regression analysis and the FGLS regression model were used to investigate the relationship between the variables. Findings: This study found that sustainability reporting which includes social, environmental, and governance disclosures positively affects market performance. This shows that the market views a company's comprehensive commitment to sustainability favorably, likely interpreting it as a sign of long-term viability, ethical conduct, and effective risk management. Practical implications: Insurance companies in Nigeria should focus on enhancing and clearly communicating their sustainability reporting initiatives, as these positively impact market performance. Firms should strategically manage and communicate these aspects to better align with investor expectations and highlight their long-term benefits. A balanced and integrated approach to sustainability reporting is essential, as it positively influences market perception and supports long-term growth and stability. Originality/value: This study contributes to the understanding of sustainability reporting within the Nigerian insurance sector. It provides empirical evidence on how different aspects of sustainability reporting: social, environmental, and governance affect market performance. The research fills a critical gap in the literature regarding African insurance markets, offering insights that can inform both academic discourse and practical applications and financial performance.

Impacts of Corporate Structural Changes on Performance of Banks and Non-Bank Financial Institutions in Nigeria, 2005-2019

This study investigated the impacts of corporate structural changes on performance of banks and non-bank financial institutions in Nigeria covering a period of 15 years (2005-2019). The capital structural change was captured with absolute change in debt equity ratio, total debt ratio, long-term debt ratio short-term debt ratio while the performance was measured with dividend per share and gross earnings. The study adopted ex-post facto research design which provides empirical solutions to research problems by using already existing data. The secondary data was extracted from the published financial report of the sampled firms. Population of the study included all the 14 quoted Deposit Money Banks (DMBs) and 25 Insurance Companies in operation in Nigeria. The sample size of the study is delimited to 10 quoted DMBs and 10 Insurance firms in Nigeria and this was achieved through random sampling technique. The collected data were analyzed using quantitative econometric techniques such as descriptive analysis, correlation analysis and panel regression analysis. It was discovered that when the model was controlled with firm size and asset tangibility, absolute changes in total debt ratio, absolute changes in long term debt ratio and absolute changes in short term debt ratio have a positive but insignificant effect on gross earnings of deposit money banks and insurance companies in Nigeria. Also, it was disclosed that there is a significant effect of absolute changes in the components of capital structure on dividend per share.

Board of Directors Structuring and Intellectual Capital Disclosure of Public Limited Liability Insurance Companies in Nigeria

This study is about the influence of corporate board structuring on intellectual capital disclosure of the 15 public limited liability insurance companies that trade on the Nigerian Exchange Group, using census sampling technique, with time scope of 10 years (2012-2021). Our research design was Ex-post facto. Secondary data were derived from the published yearly reports of the companies. The study used binary–logistic regression. The logistic regression result revealed that board independence and board size have negative and non-significant effect on intellectual capital disclosure of public limited liability insurance companies in Nigeria, but board financial expertise has a positive but not significant effect on intellectual capital disclosure of public limited liability insurance companies in Nigeria. The study concludes that corporate board structuring has no significant effects on intellectual capital disclosure of public limited liability insurance companies in Nigeria. Based on the conclusion derived from this study, the study recommends that the financial expertise of the board should be harnessed to give her an advantage in value creation through its disclosure of its intellectual capital. Keyword: Corporate Board Structuring, Board Expertise, Board Independence, Board Size, Intellectual Capital Disclosure

Training & Development and Employee Retention Rates in Listed Insurance Companies in Nigeria

This study investigates the impact of Training and Development on Employee Retention in Listed Insurance Companies in Nigeria, guided by the Human Capital Theory. A cross-sectional survey design was employed, targeting management staff from 23 insurance firms. Data was collected using structured questionnaires, and validity and reliability were ensured through rigorous testing. Multivariate Analysis of Variance (MANOVA) was conducted to test hypotheses, revealing that while training frequency and quality significantly influence job satisfaction, they do not significantly affect turnover intention. Development opportunities moderately impact job satisfaction but have no significant effect on turnover intention. The findings underscore the importance of continuous and high-quality training programs in enhancing job satisfaction, supporting the Human Capital Theory. Future research should explore additional factors influencing retention and satisfaction within the insurance sector, including organizational culture, employee engagement, and career aspirations.

Corporate Social Responsibility Disclosure and Financial Performance of Listed Insurance Firms in Nigeria

The backdrop of contending views that CSR is merely façade, just a marketing campaign, and that CSR disclosures among insurance companies in Nigeria are very scanty; whereas organizations desire to be seen as legitimate corporate citizens satisfying various stakeholders, justify this study to examine the relationship between corporate social responsibility disclosure and financial performance of listed insurance companies in Nigeria. Based on the ex-post-facto research design, this study employed secondary data obtained from published financial statements of sampled seven insurance firms between 2015 and 2022. These seven insurance companies are all currently listed in Nigerian Exchange Group. The data gathered was analysed using simple linear regression technique based on the ordinary least square method assisted by E-Views version 9. Three hypotheses were formulated and tested at 0.05 level of significance based on the specific study objectives, using the results of analysis. The findings revealed that corporate social responsibility disclosures have statistically positive significant relationship with earnings per share, net profit margin, and return on assets of listed insurance firms in Nigeria. It was recommended that the management of insurance companies should adopt policies that would favour appropriate increase in corporate social responsibility to enhance performance and peaceful coexistence with their host communities.

Institutional Efficiency And Financial Performance Of Insurance Companies In Nigeria

This study investigated the impact of institutional efficiency on the financial performance of insurance companies in Nigeria covering the period from 2011 to 2022. The study employed an ex-post facto research design, the estimation techniques utilized were feasible generalized least squares (FGLS) on a sample of five insurance companies were taken. The key variables used in the analysis included net profit margin (NPM) as dependent variable and claims processing efficiency (CPE), risk management effectiveness (RME), and regulatory compliance (RC) as independent variables. The findings displayed that claims processing efficiency (β =0.185, p > 0.05) had positive but no significant effect with net profit margin, risk management effectiveness rate (β =105.910, p > 0.05) is positive but not significantly influencing in net profit margin, regulatory compliance also have negative but does not significantly impact net profit margin of the selected insurance companies in Nigeria at 1% level (β =-12.504, p > 0.05). The study thus recommended, among others, that policy maker should encourage insurance companies to adopt measures that enhance institutional efficiency, such as investing in technology, improving risk management practices, and enhancing customer service.

Examining the Influence of Risk Management Committee Dynamics on Financial Performance: A Case Study of Listed Insurance Companies in Nigeria

The Nigerian insurance industry has experienced substantial growth due to factors like increased awareness, regulatory reforms, and technological advancements. This research aimed to explore how the composition, structure, and activities of risk management committees influence key financial performance metrics, focusing on return on assets (ROA). Data from annual reports and audited financial statements of selected insurance companies listed on the Nigerian Exchange Group from 2013 to 2022 were analyzed using both descriptive and inferential statistics. The study revealed that risk management committee size and meeting frequency positively impact financial performance, suggesting that larger committees and more frequent meetings correlate with better financial outcomes. However, factors like committee independence and gender diversity had insignificant effects on financial performance. In conclusion, the presence and effectiveness of risk management committees significantly affect the financial performance of listed insurance companies in Nigeria. The study recommends that insurance companies prioritize diverse committee compositions to benefit from a wider range of expertise and perspectives.

IMPACT OF CLAIMS SETTLEMENT ON PROFITABILITY OF GENERAL INSURANCE COMPANIES IN NIGERIA: A STUDY OF SELECTED LISTED GENERAL INSURANCE COMPANIES

This study investigates the impact of claims settlement practices on the profitability of general insurance companies in Nigeria. The study employed an ex post facto research design with the use of twenty (20) years’ financial data from 2003 to 2022 from published annual financial reports of five (5) sampled listed non-life insurance companies carrying on insurance business in Nigeria. Hypothesizing the dependent and independent variables with the proxies ROA; and LR, ER; CR. Panel data methods were used with other supporting tests using E-views (version 10) data analysis tool. With a balanced data of 100 observation - five cross-sectional data of 20 years period, the results revealed a negative relationship between the proxies (ER, LR and CR) of the independent variable – Claims settlement practices, as they could only explain to a negligible extent, the changes that occurs in the dependent variable. Premised on the findings, it is recommended that general insurance firms settle genuine claims as prompt as possible while the maintain required underwriting standard to avoid problem of adverse selection engendering possibility of ruin.

Corporate Attributes and Risk Management Disclosure of Listed Insurance Companies in Nigeria

Disclosure of risk management practices by firms enhances transparency, thus giving shareholders’ more confidence and lowering their uncertainty about future cash flows. This study therefore examined the effects of corporate attributes on risk management disclosures of listed insurance firms in Nigeria from 2013 to 2022. Firm size, firm profitability and firm leverage were the measures of corporate attributes employed in this study while risk management disclosure was the dependent variable. The research design adopted for this study was ex post facto and twenty-three listed insurance firms constituted the population of the study. Purposive sampling technique was employed to select eight listed insurance firms and secondary used were analysed using marginal logistic regression. The statistical package employed was STATA 16. From the analysis, it was found out that firm size, firm profitability and firm leverage have significant effect on risk management disclosure of listed insurance firms in Nigeria. Thus, it was concluded that some firm specific attributes can enhance risk management disclosures of listed insurance firms in Nigeria. Based on these findings, the study recommended that the management of insurance firms in Nigeria should strive to increase their level of profitability as more profitable firms have the incentives to engage in risk management and disclosure practices.

Analyzing the Impact of Liability Insurance on the Financial Performance of Insurance Companies in Nigeria

The insurance sector reforms in Nigeria sought to create a strong, diverse, and trustworthy industry that protects insured premiums, actively contributes to the country's economic progress, and participates in worldwide financial systems. Despite this development, insurance business operations and survival have not been impressive, and performance remains alarmingly poor. Therefore, this study investigates the effect of workers' compensation written premiums and workers' compensation claims paid of the chosen insurance companies' return on assets (ROA) in Nigeria. This study is a longitudinal research design. Secondary data obtained from the financial statement of five selected insurance firms in Nigeria over the year 2013 to 2022 were analysed with correlation analysis and panel regression estimation technique. The result of the study, based on Hausman verification, showed that workers' compensation written premium has a significant positive effect on RoA and that workers' compensation claims paid has a significant negative effect on RoA in Nigeria. Consequently, this investigation established that liability insurance is an important factor that may have been disturbing the performance of insurance firms in Nigeria, and must be treated with utmost care in the process of enhancing performance. Therefore, this study recommended among others that insurance firms need to increase the rate of client application towards workers' compensation insurance to realize increased levels of premium and income for performance-enhancing operations.

Effect of Enterprise Risk Management on the Profitability of Insurance Companies in Nigeria

Nigeria's insurance industry, despite contributing less than 1% to Nigeria's GDP, is considered crucial to the economy as it controls large sums of money and protects businesses from diverse risks. However, concerned about business failures in the insurance industry, the National Insurance Commission in 2012, mandated the adoption of Enterprise Risk Management (ERM) by all insurance businesses in Nigeria to address this issue and to deter future business failures. This research work studied the effect of ERM on the profitability of Nigerian insurance businesses over a 10-year period, encompassing the two years prior to, and eight years following the introduction of ERM. ERM is studied from two perspectives: ERM adoption and ERM implementation. Profitability, the dependent variable was measured by Return on Assets while ERM adoption was measured using Chief Risk Officer (CRO) and Board Risk Committee Composition (BRCC. Enterprise Risk Management Index (ERMI) measured ERM implementation. Firm Size (F. SIZE) represented by Total Assets and Firm Age (F.AGE), represented by total years of operations, served as control variables. Using the expo-facto research design and the census sampling technique, relevant secondary data about all 37 insurance companies that were in operation during the study period (2010 – 2019) was collected from published financial statements and the regulator’s reports. The multiple regression analysis revealed that while CRO and BRCC contributed positively to ROA but not at a statistically significant level, ERMI had a negative effect on ROA. The research confirms that ERM adoption only is not sufficient to influence profitability. For better results from ERM, an industry-wide review of implementation practices by NAICOM is recommended.

Consolidation, Institutional Efficiency and Financial Ratio Performance of Insurance Companies in Nigeria

The research investigated the impact of consolidation and institutional efficiency on the financial ratio performance of insurance companies in Nigeria covering the period from 2011 to 2022. The estimation technique utilized were feasible generalized least squares (FGLS) on a sample of five insurance companies was taken. The key variables used in the analysis included debt-equity-ratio (DOER) as dependent variable and claims processing efficiency (CPE), risk management effectiveness (RME), and regulatory compliance (RC) as independent variables. The findings revealed that while regulatory compliance (RC) has a significant positive impact on DOER, with an increase in RC leading to an 8.955% increase in DOER, claims processing efficiency (CPE) and risk management effectiveness (RME) were not found to have a significant impact on DOER. Specifically, an increase in CPE was associated with a 0.018% decrease in DOER, and an increase in RME was associated with a 0.864% increase in DOER, but these relationships were not statistically significant. These results suggest that while RC is a significant factor influencing changes in DOER for insurance companies in Nigeria, CPE and RME may not play a significant role in determining DOER. The study thus recommended, among others, that the insurance firm should improve the regulatory framework governing insurance companies to ensure that it encourages consolidation efforts. This will help improve the insurance firms’ debt and equity finances.

Liquidity risk and market value of insurance companies in Nigeria

The study examines the market value effect of liquidity risk of insurance companies in Nigeria. Liquidity risk has caused market value related problems and even insolvencies in the Nigeria insurance industry in the past and it remains a key risk for insurance companies to manage it now and in the future. Twenty seven (27) quoted insurance companies were used in the study. Ex-post facto research design method was also employed while the panel data were sourced from the Securities and Exchange Commission (SEC) Statistical Bulletin, Nigerian Stock Exchange (NSE) and Audited Annual Financial Reports of the studied companies from 2004 to 2023. This research adopts stationarity test, cointegration test, and pooled least squares regression test methods. The finding shows that there are significant influences of liquidity ratio, leverage ratio and firm size on market value of insurance companies in Nigeria (p = 0.0000, 0.0019 & 0.0000 < 0.05). This study concludes that there is a significant market value effect of liquidity risk of insurance companies in Nigeria. Insurance companies should have enough cash to meet their obligations both in short run and long run. There is need for regular cash flow modeling, which can project potential liquidity needs from the liability side of the balance sheet. Also, a liquidity-adjusted assets analysis can be applied to asset positions to estimate the cost of supplying liquidity from the asset side of the balance sheet to match those liability cash flow needs.

Effect of Financial Policies on Shareholders’ Wealth of Quoted Insurance Companies in Nigeria

Effect of Financial Policies on Shareholders’ Wealth of Quoted Insurance Companies in Nigeria

Fama’s model of efficient market: Analysis of the performance of insurance companies and the insurance stock price movement in Nigeria

The study analyzed the performance of insurance companies and the insurance stock price movement in Nigeria using Fama’s model of efficient market approach. Lack of information about insurance stock prices movement can influence investor’s decision making on insurance stock investments. An ex post facto research design was employed in the study. The research covers the activities of 19 insurance companies that are listed on the Nigerian Stock Exchange as at December 31, 2022. The data sample of the study comprises of daily stock prices data of 19 listed insurance companies for the period January 4, 2022 December 30, 2022. Fama-French three factor coefficient estimates obtained from quantile regression was used to test the hypothesis. The results revealed that there is a significant relationship between the insurance stock price movement and the performance of insurance companies in Nigeria, and that such relationship is negative. Recommendations were that there should be perfect information about stock market forces of demand and supply because if there is information asymmetry through which borrowers (securities issuers) know more about the risks than the lenders to (securities purchasers), the market participants may be reluctant to trade with insurance stocks, whose characteristics and behaviour under varying economic conditions are not well known. Also, it is important for the regulator in formulating policies that encourage diversification of investments among others.

Do Financial Risks affect Financial Performance of Listed Insurance Firms in Nigeria?

The study assessed the effect of financial risks on the financial performance of listed insurance firms in Nigeria. The population of this study consists of all listed insurance firms in Nigeria. However, ten (10) insurance firms were selected as sample. The selection of these insurance firms was done using judgmental sampling technique. Data for the study were extracted from their annual reports covering 10 years, from 2015 to 2021. Panel data method was employed for analysis using E-view 10.0. Results revealed that only liquidity risk (LDR) has negative and significant effect on financial performance, while the effect of credit risk and leverage risk is insignificant among the sampled insurance firms. It is concluded that liquidity risk tends to significantly impair the financial performance, if not properly monitored and mitigated. Following this, the study recommends that the sampled insurance firms should continually develop and implement risk management policies and strategies that will help reduce their risk profile in order to improve their financial performance.

Boosting employee morale through effective personnel management of selected banking and insurance firms in Nigeria

The ISA 2007 should also be changed to include notice of trade unions or their representatives in the case of large mergers, just as in the case of intermediate mergers, since legislation is a continuous process. This will help to preserve the goodwill of interested workers, who are the backbone of any organization during a merger or personnel management process. Regulatory bodies must guarantee that enough shareholders are kept informed and unsurprised throughout the merger and personnel management proceedings to avoid these business dealings becoming monopolistic. Based on this discovery, the research concluded that most Nigerian financial institutions were involved in very few strategic integration initiatives, particularly vertical integration. It is consequently recommended that Nigerian insurance and financial institutions improve the level of customisation offered to their clients to retain current clients and draw in new ones.

Critical Review of Digital Entrepreneurship and Performance of Insurance Companies in Nigeria

This study critically reviewed digital entrepreneurship and the performance of Insurance companies in Nigeria. Digital products and mobile technology were used to explore their effects on innovation and public trust in insurance. The adoption of digital tools eliminates brokers paperwork and claims process, it has the capabilities to minimize fraud - leading to reduced time, effort, and costs. The scope of the study comprises all the InsurTech insurance companies in Nigeria. This study describes the desktop and structured research method used in attaining the stated research objectives. Findings revealed that the company’s product, digital services, and novel services influence the performance of insurance companies in Nigeria. Further, Mobile technology has a positive and significant influence on public trust in Nigerian insurance. Findings revealed that more effective and efficient, smooth communication influences the performance of insurance companies in Nigeria. This study concludes that digital products and mobile technology have a positive and significant influence on innovation and public trust in Nigerian insurance. This study recommends that more company products need to be designed to be digital according to client’s preferences. And mobile technology can be utilized to reach out to millions of insurance clients. It makes the insurance business more effective and efficient. Proper utilization of mobile technology can improve the communication between the insurer and the insured.

Corporate governance, industry characteristics and quality of accounting information: Evidence from listed insurance companies in Nigeria

Corporate governance, industry characteristics and quality of accounting information: Evidence from listed insurance companies in Nigeria