THE IMPACT OF INSURANCE AND RISK MANAGEMENT IN NIGERIA (A STUDY OF SELECTED INSURANCE FIRMS IN NIGERIA, 2003 – 2020)

Risk if not well managed could lead to collapse for most organisations especially those whose core business deals with day to day handling of risk. Risk management should, therefore, be at the core of an organization’s operations by integrating risk management practices into processes, systems and culture of the entire organization. This involves identifying and analysing risks, developing and implementing risk handling techniques and monitoring the progress of these in order to avoid and/or reduce the impact of risk on the financial performance of the firm. The study used both primary and secondary data. Primary data was collected through questionnaires with 44 insurance companies giving a response. Secondary data was collected by use of desk search techniques from published reports as well as data from financial statements maintained by IRA for a period of five years from 2003 to 2020. Risk identification was found to be the most significant in influencing financial performance, followed by risk mitigation, risk management program implementation & monitoring and risk assessment & measurement respectively. This study concludes that there is a positive relationship between the adoption of risk management practices and the financial performance of insurance companies in Nigeria. The study recommends that insurance companies in Nigeria should adopt a multifaceted approach to risk management in order to derive greater benefits from their risk management efforts.