CLAIM SETTLEMENT AND FINANCIAL PERFORMANCE OF INSURANCE FIRMS IN NIGERIA

ABSTRACT

This research work critically examined claim settlement and Financial Performance in Insurance firms in Nigeria. Worldwide Insurance companies has play a vital role in contributing to the different resources allocation through effective risk management. One of the fundamentals of services offered by the insurance company is to provide it's customers with claim settlement. Insurance company’s primary objective is to restore the insured/policy holder back to the condition the insured was in before a loss and to spread risk through reinsurance. Profitability determines an insurance company’s ability to make claims payments as at when due. The objective of this study is to examine the effect of claims settlement on the financial performance of insurance companies in Nigeria. Secondary data were generated from the financial statements of the ten selected insurance companies, covering the periods 2011 to 2020. Using Panel regression analysis techniques, the data was analyzed with the aid of the Stata version 16.1 and SPSS version 26.0. The result reveals that LR (loss ratio) and NP (Net Premium), and Claim Settlement has no significant impact on the financial performance of Nigerian insurance firms.

It further reveals there is a causal relationship between Claim Settlement, Loss Ratio, and Claims Settlement. The study recommends that the state-of-the-art training mechanism should be put in place to enhance and improve the working pattern of a claim officer, which invariably might affect the organizational efficiency of insurance companies