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Employers' Liability Insurance Claims Paid and Underwriting Profit of Listed Nigerian Insurance Firms: A Longitudinal Analysis, 1986-2024

Solomon David Pere PhD, Kologa, Inebimowei Freedom PhD

Abstract

This study examined the effect of employers' liability insurance claims paid on the underwriting profit of listed Nigerian insurance firms from 1986 to 2024. The study aimed to determine the precise quantitative extent to which employers' liability claims paid influence underwriting profit. An ex-post facto research design was adopted, and the Autoregressive Distributed Lag model with an Error Correction Mechanism was used to analyze both short- and long-run effects of employers' liability claims paid on underwriting profit. Descriptive statistics summarized trends, and post-estimation tests ensured model reliability and stability. Findings revealed that the rising tide of employers' liability claims paid exerted a strong negative and significant effect, highlighting both their statistical significance and substantial financial burden. The long-run ARDL-ECM results confirmed that recurring employers' liability claims are not merely short-term shocks but fundamentally linked to underwriting profit over time. The study concluded that employers' liability claims paid shape both short- and long-run underwriting profitability, and underwriting profit thus determines the long-term sustainability of quoted Nigerian insurance firms. The study further recommended that insurers strengthen claims frameworks for employers' liability insurance, adopt robust risk mitigation strategies, and invest in efficient claims processing systems to safeguard profitability and ensure industry resilience.

Keywords

Employers' Liability InsuranceUnderwriting ProfitClaims SettlementListed Insurance FirmsNigerian Insurance IndustryARDL Model

References

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