Fire insurance premium rating and performance of insurance companies in Nigeria

Pre-Covid Era

Abstract

This study explores the importance of accurate fire insurance premium ratings and examines the challenges faced by insurers in Nigeria, which affect their overall performance. Specifically, it analyzes the impact of premium ratings on key performance indicators such as shareholder value, investment portfolios, and profitability. A descriptive survey research design was employed, utilizing secondary data sourced from the e-view platform. This method was chosen for its ability to access sensitive information while mitigating potential risks associated with direct observation. The research focused on the audited financial statements of 15 licensed general insurance companies in Nigeria over a 20-year span (1999-2019). Data was randomly sampled to ensure every member of the population had an equal chance of selection, thereby reducing bias. The financial statements were obtained from the Nigerian Stock Exchange (NSE) and Central Bank of Nigeria (CBN) databases. Both descriptive and inferential statistical methods were used for analysis. The findings revealed a significant relationship between adequate premium ratings and key determinants of property insurance, including investment portfolios, profitability, and shareholders’ capital adequacy.