The fundamental goal of the insurance industry is to spread risks. The risk-absorption role of insurers contributes to financial stability in the financial sector and gives economic institutions a sense of security and safety, which in turn boosts economic growth and development. The essence of the study therefore is to assess the pattern of profitability of insurance companies in Nigeria. An ex-post facto research design was adopted in carrying out this study. Aggregate financials of forty-one (41) non-life companies for the period 2010 – 2019 was gathered from the insurance digest of the Nigeria Insurers Association database. Information gathering was analysed using the Augmented Dicker Fuller unit root test and the Ordinary Least Square Regression techniques. The data generated from the financial statements of these companies are Return on Assets (ROA), Net Claims (NC), and Expense Ratio (ER). Where: Return on Asset (ROA) = Net Income before taxes/Total Assets, Net Claims (NC) = Total claims paid in the year, Expense Ratio (ER) = Total Underwriting expenses/Earned Premium. The findings of this study indicate that ROA, or return on assets, has an indirect relationship with NC (net claims) and also indirect relationship with ER (expense ratio). According to the study, claims managers in the Nigerian insurance industry should manage their claims processes effectively in order to minimize claims against each earned premium. Future research can examine the effect of the explanatory variables on alternative profitability measures.
AJIJOLA et al. (Sat,) studied this question.