FIRMS SPECIFIC FACTORS AND PERFORMANCE OF LISTED INSURANCE FIRMS IN NIGERIA

ABSTRACT 

This study investigated firms’ specific factors and performance of listed insurance firms in Nigeria for a period of 22 years (2001 to 2022). The specific objectives of the study were to ascertain how insurance leverage (LEV), insurance penetration (INPEN), liquidity (LIQ) and insurance firm size (FSIZ) affect the performance of listed insurance firms in Nigeria. To achieve this, the Autoregressive Distributed Lags (ARDL) technique was employed in the analysis of data, and the results obtained indicate that insurance leverage (LEV) and insurance firm size (FSIZ), have a weak negative relationship with firms’ financial performance of insurance firms in Nigeria; insurance penetration (INPEN) has a significant negative impact on financial performance; while liquidity (LIQ) has a weak positive relationship with insurance firms’ performance in the long run. The study therefore recommends among others that, since the outcome of this study has shown that leverage is capable of reducing financial performance of insurance firms in the long run, it therefore follows that management should ensure that proper combination of debt-equity ratio (leverage) in the company’s capital structure is employed at the right time for the right investment. This is the only way to ensure that leverage have the much needed positive impact on financial performance and also ensure profitable return on investment.