ABSTRACT
Insurance services are now being
integrated into wider financial industry and the insurance sector plays an
important role in service based economy of Nigeria. Profitability is one of the
most important objectives of fInancial management because one goal of financial
management is to maximize the owner's wealth and profitability is very
important determinants of performance. This study examined the effects of firm
internal factors proxy by size of company, leverage, loss ratio, underwriting
risk, management expense ratio, tangibility of assets, liquidity and premium
growth on profitability of insurance companies listed on the Nigerian Stock
Exchange proxy by return on assets. A key indicator of insurance companies
profitability is return on assets (ROA), defined as the before tax profit
divide by total assets (TA). Profitability is dependent variable while size of
company, leverage, loss ratio, underwriting risk, management expense ratio, and
tangibility of assets, liquidity and premium growth are independent variables.
The main objective of this study is to determine the firm internal/actors
influencing the profitability of the insurance companies listed on the Nigerian
Stock Exchange. The main objective of this study will be achieved by
establishing the effect of the identified fIrm internal factors on the
profitability of insurance companies listed on the Nigerian Stock Exchange. The
study adopted a descriptive research design and a census study qf 28 listed
insurance companies on the Nigerian Stock Exchange was studied. Secondary data
were obtained from the financial statements of insurance companies. The study
was quantitative in nature. Regression model was used to analysis the secondary
data collected for the insurance companies. The findings from the test of
hypotheses show that there is significant relationship between profitability
proxy by return on total assets, and management expense ratio, tangibility of
assets and liquidity. It was also found that leverage ratio, liquidity ratio,
management expense ratio and tangibility of assets are suitable determinants of
the profitability of insurance companies listed on the Nigerian Stock Exchange.
The study recommends that in order. for insurance companies to increase their
profitability, the companies should work towards improving the management
expense ratio, tangibility of assets, liquidity and leverage to increase their
profits. Higher profits would mean better reserves which would assist the
insurer to operate in times of large unexpected claims and also help them
maintain liquidity at all times.
OLADEPO, J (2021). Determinants Of Profitability Of The Insurance Companies Listed On The Nigerian Stock Exchange: An Empirical Review Of Firm Internal Factors. Mouau.afribary.org: Retrieved Nov 27, 2024, from https://repository.mouau.edu.ng/work/view/determinants-of-profitability-of-the-insurance-companies-listed-on-the-nigerian-stock-exchange-an-empirical-review-of-firm-internal-factors-7-2
JIMOH, OLADEPO. "Determinants Of Profitability Of The Insurance Companies Listed On The Nigerian Stock Exchange: An Empirical Review Of Firm Internal Factors" Mouau.afribary.org. Mouau.afribary.org, 28 Jul. 2021, https://repository.mouau.edu.ng/work/view/determinants-of-profitability-of-the-insurance-companies-listed-on-the-nigerian-stock-exchange-an-empirical-review-of-firm-internal-factors-7-2. Accessed 27 Nov. 2024.
JIMOH, OLADEPO. "Determinants Of Profitability Of The Insurance Companies Listed On The Nigerian Stock Exchange: An Empirical Review Of Firm Internal Factors". Mouau.afribary.org, Mouau.afribary.org, 28 Jul. 2021. Web. 27 Nov. 2024. < https://repository.mouau.edu.ng/work/view/determinants-of-profitability-of-the-insurance-companies-listed-on-the-nigerian-stock-exchange-an-empirical-review-of-firm-internal-factors-7-2 >.
JIMOH, OLADEPO. "Determinants Of Profitability Of The Insurance Companies Listed On The Nigerian Stock Exchange: An Empirical Review Of Firm Internal Factors" Mouau.afribary.org (2021). Accessed 27 Nov. 2024. https://repository.mouau.edu.ng/work/view/determinants-of-profitability-of-the-insurance-companies-listed-on-the-nigerian-stock-exchange-an-empirical-review-of-firm-internal-factors-7-2