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ABSTRACT
The study looks on the factors that affect insurance companies' profitability in Nigeria from 2001 to 2023. The study's particular goals were to determine whether the profitability of insurance firms is significantly impacted by insurance leverage (LEV), insurance premium (INPRM), firm size (FSIZE), and liquidity ratio. To this end, the data was analysed using the fully modified least square (FMOS) method. The results show that, in general, insurance leverage (LEV) has a weakly negative impact on the profitability of insurance firms; on the other hand, insurance premium (INPRM) and liquidity ratio (LIQ) have a significant positive impact on the profitability of insurance firms; and firm size (FSIZE) has no discernible effect on the profitability of firms in Nigeria. The conclusion is that, in the determination of insurance firms’ profitability in Nigeria, insurance premium (INPRM) and liquidity ratio (LIQ) are crucial factors to be considered by management and policy makers. The study therefore recommends among others that since premium has shown to be very crucial to insurance firms’ profitability, therefore, appropriate investment of collected premium to productive ventures is imperative for management; especially in the financial market and the real economy and, is capable of bring in higher returns and thereby improving the overall profitability of insurance firms.
