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Consolidation, Institutional Efficiency and Financial Ratio Performance of Insurance Companies in Nigeria

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  • Olurotimi Ogunwale.

    (Department of Finance, Babcock University, Ilishan-Remo, Ogun State, Nigeria)

  • Professor Ishola Rufus Akintoye.

    (Department of Accounting, Babcock University, Ilishan-Remo, Ogun State, Nigeria)

  • Charles Ogboi.

    (Department of Finance, Babcock University, Ilishan-Remo, Ogun State, Nigeria)

  • Peter Ifeanyi Ogbebor

    (Department of Finance, Babcock University, Ilishan-Remo, Ogun State, Nigeria)

Abstract

The research investigated the impact of consolidation and institutional efficiency on the financial ratio performance of insurance companies in Nigeria covering the period from 2011 to 2022. The estimation technique utilized were feasible generalized least squares (FGLS) on a sample of five insurance companies was taken. The key variables used in the analysis included debt-equity-ratio (DOER) as dependent variable and claims processing efficiency (CPE), risk management effectiveness (RME), and regulatory compliance (RC) as independent variables. The findings revealed that while regulatory compliance (RC) has a significant positive impact on DOER, with an increase in RC leading to an 8.955% increase in DOER, claims processing efficiency (CPE) and risk management effectiveness (RME) were not found to have a significant impact on DOER. Specifically, an increase in CPE was associated with a 0.018% decrease in DOER, and an increase in RME was associated with a 0.864% increase in DOER, but these relationships were not statistically significant. These results suggest that while RC is a significant factor influencing changes in DOER for insurance companies in Nigeria, CPE and RME may not play a significant role in determining DOER. The study thus recommended, among others, that the insurance firm should improve the regulatory framework governing insurance companies to ensure that it encourages consolidation efforts. This will help improve the insurance firms’ debt and equity finances.

Suggested Citation

  • Olurotimi Ogunwale. & Professor Ishola Rufus Akintoye. & Charles Ogboi. & Peter Ifeanyi Ogbebor, 2024. "Consolidation, Institutional Efficiency and Financial Ratio Performance of Insurance Companies in Nigeria," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 8(7), pages 1044-1054, July.
    • Handle: RePEc:bcp:journl:v:8:y:2024:i:7:p:1044-1054
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    References listed on IDEAS

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    1. Charles W. Mahoney, 2021. "Acquire or Expire: Publicly Traded Defense Contractors, Financial Markets, and Consolidation in the U.S. Defense Industry," Defence and Peace Economics, Taylor & Francis Journals, vol. 32(3), pages 325-342, April.
    2. MACCHI, Chiara, 2021. "The Climate Change Dimension of Business and Human Rights: The Gradual Consolidation of a Concept of ‘Climate Due Diligence’," Business and Human Rights Journal, Cambridge University Press, vol. 6(1), pages 93-119, February.
    3. Yen Thi Tran & Thanh Thi Cam Tran & Trang Cam Hoang, 2020. "Determinants of the Implementation of the Public-Sector Consolidated Financial Statements in Vietnam," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 68(5), pages 903-913.
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