EFFECT OF RISK MANAGEMENT ON THE FINANCIAL PERFORMANCE OF LISTED INSURANCE FIRMS IN NIGERIA

ABSTRACT This study examines the effect of risk management on the financial performance of listed insurance firms in Nigeria over the period 2014–2023. Financial performance, measured through indicators such as profitability, liquidity, and solvency, remains a critical factor for organizational growth and economic development. However, the Nigerian insurance industry continues to experience low penetration and weak performance, partly attributed to inadequate risk management practices. This study focuses on key components of risk management risk identification, risk assessment, and risk mitigation and evaluates their influence on firm performance. The research is motivated by gaps in existing literature, particularly the limited empirical evidence within the Nigerian context and the inconsistency of findings across different countries. Using a structured analytical approach, the study formulates research questions and hypotheses to determine the significance of each risk management component on financial outcomes. The study is grounded in relevant theories, including stakeholder theory, agency theory, and enterprise risk management theory, which collectively explain the relationship between risk practices and organizational performance. Findings from prior empirical studies suggest that effective risk management enhances profitability, reduces uncertainty, and improves decision-making, while poor risk practices lead to increased losses and weak financial outcomes. This study contributes to knowledge by providing context-specific insights into the Nigerian insurance sector and offers practical recommendations for improving risk management frameworks. The results are expected to benefit policymakers, regulators, investors, and industry practitioners by enhancing understanding of how risk management can drive