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The study examined the relationship between insurance premium, penetration rate and performance of the Nigerian insurance firms for the period 2001 to 2022. The specific objectives of the study was to examined how insurance firms financial performance (INPER), insurance premium (PREM),insurance penetration (PEN), insurance investment rate (INVR) and gross domestic product (GDP) affect the performance of insurance firms in the country. The fully modified least square (FMOS) method was employed in the analysis of data, and the results obtained generally indicate that insurance premium (PREM) has significant negative impact on insurance firms’ performance; insurance penetration (PEN) has a significant positive relationship with insurance firms’ performance; investment rate (INVR) is positively signed but failed the 5 percent significance level, and while gross domestic product (GDP) has a weak negative relationship with insurance firms performance in Nigeria. The study therefore conclude that, in the determination of insurance firms’ performance in Nigeria, insurance premium (PREM) and penetration rate (PEN) are crucial factors to be considered by management and policy makers, and these should not be ignored if continuous performance of insurance firms would be guaranteed. The study recommends that, since premium has shown to be very crucial to insurance firm financial performance, 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 financial performance of insurance firms.
