IIARD International Institute of Academic Research and Development

IIARD INTERNATIONAL JOURNAL OF BANKING AND FINANCE RESEARCH (IJBFR )

E-ISSN 2695-1886
P-ISSN 2672-4979
VOL. 10 NO. 10 2024
DOI: 10.56201/ijbfr.v10.no10.2024.pg114.128

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Financial Attributes and Dividend Policy of Listed Insurance Companies in Nigeria

Prof. Aliyu IDRIS

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Abstract

The study utilises a correlational research design to investigate the influence of financial characteristics on the dividend policies of listed insurance companies in Nigeria over ten years. The research population includes twenty (20) insurance firms listed on the Nigerian Stock Exchange as of December 31, 2023, covering the period from 2014 to 2023. A sample of fifteen (15) insurance companies was selected using a two-point filter and purposive sampling technique. Data analysis was conducted using the Generalized Least Squares (GLS) random effects regression method. The findings reveal that liquidity, profitability, and leverage significantly affect the dividend policies of Nigeria’s listed insurance firms. Based on these results, the study recommends that Nigerian insurance companies reassess their dividend policies in light of the negative relationship between liquidity, profitability, and dividend payouts. Firms should prioritise sustainable, long-term profitability, balancing reinvestment needs and dividend distribution. A strategic profit allocation approach dedicating part of the profits to dividends while reinvesting the remainder in innovation and expansion can enhance shareholder value and the company's overall growth.

keywords:

Dividend; Liquidity; leverage; Profitability; Insurance Companies

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