Abstract

The inverse cycle nature of insurance business suggests the adoption of unique firm characteristics upon which its operations rely. These characteristics to a large extent determine risk exposure, underwriting capacity, risk appetite, risk tolerance among others. This study evaluated the impact of these technical characteristics on the financial performance on non-life insurance companies in Nigeria. This study adopted descriptive research design and relied on secondary data of all the non-life companies operating in Nigeria between 2006-2019. Data were gathered from the annual financial statements as contained in NIA, a publication of Nigeria Insurers Association. The study used firm size, premium growth, loss ratio, liquidity, investment, capital adequacy, reserves and underwriting capacity as proxies of technical characteristics while return asset, return on equity and return on investment were used as proxies of financial performance. The results revealed a significant impact of joint technical characteristics variables on the financial performance. Specifically, the study revealed that reserves, shareholders’ fund, firm size, capital adequacy and premium growth are the main technical characteristics that influence the financial performance. The study recommended that non-life insurance companies must constantly monitor their reserves, increase shareholders fund, increase capital base, capital adequacy, and grow their portfolio through premium generation.

Details

Title
On the Technical Characteristics of Insurance Operations and Financial Performance of Non-life Insurance Companies in Nigeria.
Author
Abass, Olufemi; Sewhenu Francis Dansu; Yeside, Abiodun Oyetayo
Section
Financial Economics
Publication year
2021
Publication date
2021
Publisher
Universitatea Danubius Galati
ISSN
2065-0175
e-ISSN
2067-340X
Source type
Scholarly Journal
Language of publication
English; French
ProQuest document ID
2769349647
Copyright
© 2021. This work is published under https://creativecommons.org/licenses/by-nc/4.0/ (the “License”). Notwithstanding the ProQuest Terms and Conditions, you may use this content in accordance with the terms of the License.