IDEAS home Printed from https://ideas.repec.org/a/vrn/journl/y2021i3p330-343.html
   My bibliography  Save this article

Effect of Risk Mitigation on Profitability of Insurance Industries in Nigeria

Author

Listed:
  • 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)

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.

Suggested Citation

  • Kehinde Isiaq Olaiya & Kareem Abidemi Arikewuyo & Ashim Babatunde Shogunro & Lateef Adewale Yunusa, 2021. "Effect of Risk Mitigation on Profitability of Insurance Industries in Nigeria," Business & Management Compass, University of Economics Varna, issue 3, pages 330-343.
    • Handle: RePEc:vrn:journl:y:2021:i:3:p:330-343
    as

    Download full text from publisher

    File URL: https://journal.ue-varna.bg/uploads/20211108092229_451153456188ec5582a89.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Munther Al-Nimer & Sinan S. Abbadi & Ahmad Al-Omush & Habib Ahmad, 2021. "Risk Management Practices and Firm Performance with a Mediating Role of Business Model Innovation. Observations from Jordan," JRFM, MDPI, vol. 14(3), pages 1-20, March.
    2. Gurudeo Tularam & Gowri Sameera Attili, 2012. "Importance of Risk Analysis and Management - The Case of Australian Real Estate Market," Chapters, in: Nerija Banaitiene (ed.), Risk Management - Current Issues and Challenges, IntechOpen.
    3. Ibrahim Abidemi Odusanya & Olumuyiwa Ganiyu Yinusa & Bamidele M. Ilo, 2018. "Determinants of Firm Profitability in Nigeria: Evidence from Dynamic Panel Models," SPOUDAI Journal of Economics and Business, SPOUDAI Journal of Economics and Business, University of Piraeus, vol. 68(1), pages 43-58, January-M.
    4. Sathyamoorthi C. R. & Mogotsinyana Mapharing & Mphoeng Mphoeng & Mashoko Dzimiri, 2020. "Impact of Financial Risk Management Practices on Financial Performance: Evidence from Commercial Banks in Botswana," Applied Finance and Accounting, Redfame publishing, vol. 6(1), pages 25-39, February.
    5. Violeta Sadiku(Alterziu), 2016. "Strategies for Prevention: Mental Health Nurse Burnout and Stress," European Journal of Multidisciplinary Studies Articles, Revistia Research and Publishing, vol. 1, ejms_v1_i.
    6. C.R. Sathyamoorthi & Mogotsinyana Mapharing & Mashoko Dzimiri, 2020. "Liquidity Management and Financial Performance: Evidence From Commercial Banks in Botswana," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 11(5), pages 399-413, October.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Probir Kumar Bhowmik & Shahadat Hossain & Niluthpaul Sarker, 2025. "Liquidity in State-owned Banks: what matters the most," Advances in Management and Applied Economics, SCIENPRESS Ltd, vol. 15(1), pages 1-5.
    2. Ullah, Nazim & Mat Nor, Fauzias & Abu Seman, Junaidah & fadly, ahmed & ainna, nur, 2023. "Acquirer’s Operational Performance and Stability of Islamic Banks: Mediation Role of Market Structure," MPRA Paper 118683, University Library of Munich, Germany.
    3. Karikari Amoa-Gyarteng & Joseph Appiah Coleman & Oyin-Emi Eserifa, 2025. "Financial sustainability and credit risk: evidence from listed banks in Ghana," SN Business & Economics, Springer, vol. 5(7), pages 1-24, July.
    4. Aliu Oguntade Fatai & Raymond Osi Alenoghena, 2024. "The Role of Deposit Growth in The Productivity of Deposit Money Banks in Nigeria: Case Study of Union and Wema Banks in Lagos State," International Journal of Research and Scientific Innovation, International Journal of Research and Scientific Innovation (IJRSI), vol. 10(12), pages 234-246, January.
    5. Meena Madhavan & Mohammed Ali Sharafuddin & Thanapong Chaichana, 2022. "Impact of Business Model Innovation on Sustainable Performance of Processed Marine Food Product SMEs in Thailand—A PLS-SEM Approach," Sustainability, MDPI, vol. 14(15), pages 1-33, August.
    6. Jonathan Mwau Mulwa, 2020. "Firm Size And Performance: An Econometric Analysis Of The Financial Performance Of Deposit Taking Microfinance Institutions In Kenya," Noble International Journal of Economics and Financial Research, Noble Academic Publsiher, vol. 5(5), pages 56-62, May.
    7. KUFO Andromahi & SHTEMBARI Eriona, 2023. "How Board Size and Board Independence Affect Insurance Companies’ Performance," European Journal of Interdisciplinary Studies, Bucharest Economic Academy, issue 01, March.
    8. KamukaKang’ombi & Dr. Charles Muwe Mungule, 2023. "Assessing Factors Affecting Financial Performance of Insurance Companies in Zambia," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 7(5), pages 153-166, May.
    9. Dragan Milić & Tihomir Novaković & Dragana Tekić & Bojan Matkovski & Danilo Đokić & Stanislav Zekić, 2023. "Economic Sustainability of the Milk and Dairy Supply Chain: Evidence from Serbia," Sustainability, MDPI, vol. 15(21), pages 1-21, October.
    10. Dorcas Kiai & Peter Lewa & James Karimi, 2019. "Influence of human resource planning on performance of firms listed in the Nairobi Securities Exchange in Kenya," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 8(5), pages 54-61, September.
    11. Jordan KJOSEVSKI & Mihail PETKOVSKI & Kiril SIMEONOVSKI, 2022. "The Effects of Individual and Economic Risks and Stress Testing of Non-Life Sector Profitability: The Case of the NorthMacedonian Insurance Sector," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(2), pages 125-144, April.
    12. Ega Annisa Rizti & Berly Martawardaya, 2022. "Does It Pay to be Good? The Performance of Indonesian Green Companies from 2009–2018," Economics and Finance in Indonesia, Faculty of Economics and Business, University of Indonesia, vol. 68, pages 17-36, Juni.
    13. Ghazi Zouari & Imen Abdelmalek, 2020. "Financial Innovation, Risk Management, And Bank Performance," Copernican Journal of Finance & Accounting, Uniwersytet Mikolaja Kopernika, vol. 9(1), pages 77-100.
    14. Antonios Persakis, 2024. "The impact of climate policy uncertainty on ESG performance, carbon emission intensity and firm performance: evidence from Fortune 1000 firms," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 26(9), pages 24031-24081, September.
    15. Le Thanh Ha, 2025. "Circular Economy in European Countries: The Required Link for Green Foreign Financing Investment Policy," Circular Economy and Sustainability, Springer, vol. 5(3), pages 1727-1756, June.
    16. Isaac Linus Ochieng’, 2025. "Credit Risk Control and Asset Quality of Listed Commercial Banks at the Nairobi Securities Exchange, Kenya," International Journal of Finance and Accounting, IPRJB, vol. 10(5), pages 17-34.
    17. repec:ers:journl:v:xxiv:y:2021:i:2b:p:502-514 is not listed on IDEAS
    18. Charles Ayodele JEGEDE & Yusuf Aina SOYEBO & Segun Kamoru FAKUNMOJU & Olajide Idowu OKUNBANJO, 2021. "Financial Risk Management and Financial Performance of International Authorisation Quoted Deposit Money Banks (DMBs) in Nigeria," Economics and Applied Informatics, "Dunarea de Jos" University of Galati, Faculty of Economics and Business Administration, issue 2, pages 178-185.
    19. Rim Zouari‐Hadiji, 2023. "Financial innovation characteristics and banking performance: The mediating effect of risk management," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 28(2), pages 1214-1227, April.
    20. Adam Dymitrowski & Paweł Mielcarek, 2024. "Innovation Business Model Based on New Technologies and Company Relationships," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(1), pages 2341-2360, March.
    21. Ahmed Eltweri & Nedal Sawan & Krayyem Al-Hajaya & Zineb Badri, 2024. "The Influence of Liquidity Risk on Financial Performance: A Study of the UK’s Largest Commercial Banks," JRFM, MDPI, vol. 17(12), pages 1-23, December.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    JEL classification:

    • E59 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Other
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:vrn:journl:y:2021:i:3:p:330-343. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Yana Doneva (email available below). General contact details of provider: https://edirc.repec.org/data/uevarbg.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.