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Effect of Risk Mitigation on Profitability of Insurance Industries in Nigeria

Kehinde Isiaq Olaiya (), Kareem Abidemi Arikewuyo (), Ashim Babatunde Shogunro () and Lateef Adewale Yunusa ()
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Kehinde Isiaq Olaiya: Department of Banking and Finance, Faculty of Administration and Management Sciences, Olabisi Onabanjo University, Ago-Iwoye, Ogun state, Nigeria
Kareem Abidemi Arikewuyo: Department of Business Administration, Faculty of Social and Management Sciences, Southwestern University, Okun - Owa, Nigeria
Ashim Babatunde Shogunro: Department of Actuarial science and Insurance, Faculty of Management Science, University of Lagos
Lateef Adewale Yunusa: Department of Banking and Finance, Faculty of Administration and Management Sciences, Olabisi Onabanjo University, Ago-Iwoye, Ogun state, Nigeria

Izvestiya, 2021, issue 3, 330-343

Abstract: Risk management plays a critical part in every organization‘s profit maximization through risk cost minimization for wise protection, which cannot be overstated. Risk mitigation (rmt), risk monitoring (rmn), risk management environment, procedure, and policies (epp), and risk measurement (rme) in relation to the profitability of the insurance industry in Nigeria were randomly selected from a well-structured 5-point Likert scale questionnaire ranging from ‘5 strongly agree‘ to ‘4 agree‘, ‘3 undecided‘ to ‘1 strongly disagree‘. Using the StataSE 14 statistical software, one hundred and twenty (120) questionnaires were recovered from respondents, accounting for 83 percent of the total questionnaires sent using the multiple regression statistical methodology. Risk reduction and risk monitoring have a considerable impact on the profitability of insurance companies in Nigeria, according to the findings. As a result, it concluded that risk mitigation and monitoring are important factors in determining industry profitability, and those insurance regulators should work to ensure that risk identification, assessment, measurement, and control mechanisms are implemented in accordance with best global practices in order to avoid financial crises and improve insurance performance.

Keywords: Cost-minimization; Insurance-companies; Monitoring Profitability; Risk-management (search for similar items in EconPapers)
JEL-codes: E59 M41 (search for similar items in EconPapers)
Date: 2021
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Handle: RePEc:vrn:journl:y:2021:i:3:p:330-343