ABSTRACT
This research delves into the realm of credit risk modeling within the life insurance sector. It set out with several objectives, including identifying effective methods for modeling credit risk tailored to life insurance companies, evaluating the repercussions of credit risks on these insurers, investigating the advantages of extending credit to them, exploring the connection between credit practices and the performance of insurers, and gauging the accessibility of credit facilities for insurers.
To conduct this investigation, a combination of descriptive and explanatory research designs was employed. Data collection encompassed the use of questionnaires and library research. The primary data sources consisted of responses gathered from 32 employees at African Alliance Insurance Plc in Benin. Data analysis hinged on the chi-square statistical tool with a significance level set at 5%. The findings, displayed through frequency tables and percentages, unveiled that insurance companies grapple with substantial credit risks that have adverse effects on their operations.
Consequently, the study recommends that the Nigerian government and relevant stakeholders should collaborate to establish a credit model for insurance facilities that carries lower levels of risk, in alignment with the insights derived from this research.
