ABSTRACT

This study examined the determinants of financial performance of insurance firms in Nigeria for the period 2001 to 2021. Four related financial performance of insurance firms’ variables were used (liquidity, firm size, inflation rate and gross domestic products). The ordinary least square econometric technique (OLS) was employed for the analysis of the data. The results from the analysis generally showed that liquidity (LIQ) and inflation rate (INFR) have weak negative relationship with insurance firms’ financial performance in Nigeria. Those of firm size (FSIZ) and gross domestic products (GDP) has significant positive impact on insurance firms’ financial performance.  The study recommends that, insurance firms should as a matter of importance embark on more productive investment outside the normal pool contributions received from various clients, so as to increase existing assets base from where claims can be promptly paid. Doing this will make total assets as a measure for firm size to continue to have positive impact on financial performance of insurance firms in Nigeria. Also, the government should diverse a means of boosting current economic activities in the country because, with increased economic activities, insurance business will boom as more workers and businessmen will now have enough cash to spare and to take advantage of insurance policy of their choice. This in turn will increase the total premium to insurance firms.