An Exploratory Study of Asset Liability Management in the Insurance Industry in Nigeria: A Panel Approach

Authors

  • Folake Olowokudejo University of Lagos
  • Oluwaleke Ebenezer Akindipe University of Lagos

Keywords:

asset liability management; profit after tax; shareholder’s fund; total asset of companies

Abstract

Asset Liability Management’s main goal is to manage risk, not eliminate it, in order to reduce
net interest income volatility in the short term and safeguard the organization’s economic worth over
the long term. This study looked at certain best practices in asset-liability management and how they
affected the performance of the insurance business between 2011 and 2021 while taking into
consideration the particular characteristics of the Nigerian economy. Data on total corporate assets,
shareholder’s funds, and profit after tax for the time period were taken from the annual reports and
digest of the Nigerian Insurers Association (NIA). The results of the data’s stationarity test showed that
the data are stationary at the 1%, 5%, and 10% levels of significance. The determined probability (Fstatistic)
value of 0.000922 from the ordinary least squares regression is less than the 0.05 significant
value, indicating that the data are significantly significant. According to the calculated linear coefficient
of determination (R2= 0.825737), the shareholder’s fund and total assets of the chosen
enterprises account for 82.5737 percent of the profit after tax. According to the study’s findings, assetliability
management and the financial success of insurance businesses in Nigeria are related.

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Published

2022-09-16

Issue

Section

Business Administration and Business Economics