ABSTRACT

The study empirically examined the determinants of financial performance of insurance firms in Nigeria for a period of 8 years (2012 to 2019). The rationale for the current study is predicated on the fact that insurance firm’s financial performance in finance has been widely investigated across the globe. Beside, factors that determines the performance of firms varies from one firm/industry to another. The study utilizes the panel unit root test, correlation coefficient and the fully modified least square (FMOLS) econometric technique on a cross sectional data of 11 insurance companies listed on the Nigerian Stock Market for the period 2012 to 2019. The results obtained from the empirical analysis indicate that liquidity (LIQ), and Equity investment (EQTY) have significant negative relationship with insurance firms’ financial performance for the period. Those of leverage (LEV) and firm size (FSIZE) are seen to have significant positive relationship with performance of insurance firms. The study recommends among others that, since liquidity (LIQ) is a major determinant of insurance firms’ financial performance in Nigeria, insurance firms’ managers and policy makers in Nigeria should evolve an appropriate policies that will either sustain or increase the current level of earnings through premium that will continue to guarantee consistent liquidity.