DETERMINANTS OF FIRM’S PERFORMANCE IN NIGERIAN INSURANCE SECTOR

ABSTRACT

This study examines the determinants of firm’s performance in Nigerian insurance sector: evidence from quoted insurance firms in Nigeria. The analysis involves the use of two general known method namely; statistical and econometric methods in the view of providing a rich background for the investigation, using returns on asset (ROA) as performance indicator and four performance-enhancing variables to include leverage, firm size (log of total asset), firm capital expenditure, and equity capital as independent variables. A sample of 12 listed insurance firms between 2010 and 2018 were inspected using descriptive statistics, correlation analysis and multivariate panel regression technique. Out of four variables examined in the study, only firm capital expenditure and equity capital proved to be good determinants of insurance firm’s performance in Nigeria within the course of the study. The study also revealed that money supply has a direct or positively relationship with firm’s performance in Nigerian insurance. We recommend among others; thatinsurance firms should establish a well matched portfolio of their assets and liability in terms of cash flows or rather they should ensure that they create additional reserve so that it can assist them to cover the interest rate since low interest may create a discrepancy on the earnings.