INSURANCE PENETRATION AND FIRM PERFORMANCE

ABSTRACT

This examines the effect of insurance penetration on firm performance of insurance firms. The major areas of performance for consideration are profitability, liquidity and claim management. The study utilized data from the insurance sector in Nigeria. 26 firms were covered in the study. The study employed the panel least square to estimate the hypothesized equation and the findings from the empirical investigation revealed that insurance penetration positively and significant affect insurance firm’s profitability in Nigeria, that insurance penetration positively and significantly affect the liquidity of insurance firms in Nigeria and that insurance penetration positively and significantly affect claim management of insurance firms in Nigeria. Based on this findings, the study therefore recommends that insurance firms should design insurance product that can capture those who have never subscribed to insurance product to be enticed to the insurance market, the government should strengthen regulation to make sure that were insurance policy is a requirement, the people do not evade such policy and the government should also increase surveillance and sanction for people and firms who default in subscribing to insurance product.