ABSTRACT

The study examined the effect of debt-equity mix on the performance of quoted insurance firms in Nigeria for a period of 10 years (2010 to 2019). The rationale for the present study is predicated on the fact that decision on the appropriate mix of debt and equity to adopt in financing insurance firms by management plays a significant role in the performance of insurance firms. The study utilized panel data of insurance firms listed on the Nigerian stock exchange. The study employed the panel data regression analysis techniques on variables such as market value of quoted insurance firms (MVF), debt to capital ratio (DC), debt to equity ratio (DE) and long term debt to equity ratio (LE). The study showed evidence that debt to capital ratio (DC) had a positive and statistically significant relationship with market value of quoted insurance firms. Also, the study revealed evidence that debt to equity ratio (DE) had a negative and statistically insignificant relationship with the market value of quoted insurance firms. Finally, the study showed evidence that long term debt to equity ratio had a positive and statistically significant relationship with the market value of quoted insurance firms. The study recommends among others that; quoted insurance firms in Nigeria should increase their investment in the procurement of fixed assets which in the long run has effect on its market value; the efficient management of the debt ratio of a firm can increase its value to the market; and the financial manager of quoted insurance firms should have knowledge of the sources of working capital funds as well as the company ability to meet short term liabilities as at when due.