IMPACT OF RISK MANAGEMENT PRACTICES AND PERFORMANCE OF INSURANCE COMPANIES IN NIGERIA
Abstract
Managing risk is a key factor for a business to achieve their goals especially the insurance
business. However, risks taking is key to most businesses in achieving goals and objectives of
their organization, it is therefore important for the insurance companies to take risk
management into consideration for avoidance of danger that may arise from risky activities.
Unfortunately, some insurance firms still face numerous challenges such as having
difficulties in growth of their profit and some end up closing doors.This issue provides a need
to investigate the impact of risk management practices on the performance of the insurance
companies. The population of the study comprises of all the fifty eight (58)life and general
insurance companies operating in Nigeria. Twenty(20) insurance companies were randomly
selected. 120 Copies of structured questionnaire were distributed to senior manager staffs
which are the risk assesors of the insurance companies. The study used SPSS package to
analyse the data collected, multiple regression was used to test the formulated hypotheses.
The findings of the study established statistical significance of risk survey on the insurance
companies performance is really high, since the p-values of the multiple regression
coefficients are less than 0.05 given the implication that the insurance companies’ put in
place a thorough survey process before insuring any risk which leads to the increase in their
profitability. The study also found that risk categorization and risk transfer are also
significant to the insurance companies performance which leads to a rise in the insurance
performance. It is therefore recommended that the management of insurance companies in
Nigeria should put in place cost-effective measures for timely risk survey and other measures
like effective risk mitigation so as to ensure that their performance is not impacted
negatively.
Keywords: Risk Management , Insurance Companies, Performance.
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