Evaluating the Impact of Risk on Financial Performance of Listed Insurance Firms in Nigeria
DOI:
https://doi.org/10.61143/umyu-jafr.8(1)2025.009Keywords:
Financial performance solvency risk, reinsurance risk, insuranceAbstract
This study examined the risk and financial performance of listed insurance firms in Nigeria for the period of ten (10) years from 2015 to 2024. The population of the study consists of 16 insurance firms listed on the floor of the Nigerian Stock Exchange as at 31st December 2024. Secondary data was extracted from the audited financial reports of the sampled insurance firms. The data was analyzed using the regression model. The study findings revealed that solvency risk is positively and significantly influencing the financial performance of listed insurance firms in Nigeria. Conversely, reinsurance risk revealed a statistically insignificant negative impact on financial performance. The study concluded that solvency risk has a strong association with the financial performance of the firms for the period. The study recommends that Insurance firms should strive to maintain adequate net income which can cover thier total liabilities as they fall due. Furthermore, policymakers in government should formulate economic and financial policies with due cognizance of factors that can affect an insurance firm’s performance. This requires a holistic view to policy formulation to ensure that cost trade-offs are considerably minimized in all strata of the economy.
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