ENTERPRISE RISK MANAGEMENT AND LIFE INSURANCE COMPANIES FINANCIAL
PERFORMANCE

EDIKE, JOSIAH BOLOU-OWEI
edikejosiah@gmail.com
IPIGANSI, PRETORIAMRS
mounpretoria@yahoo.com
Department of Finance, Banking and Insurance, Niger Delta University, Wilberforce Island PMB
071 Yenagoa, Bayelsa State, Nigeria

Abstract
This study has examined the impact of Enterprise Risk Management (ERM hereafter) on life
insurance financial performance in Nigeria. Using purposive sampling technique, the study used
secondary data from annual report from thirteen (13) of the fifteen (15) life insurance companies
with 78 observations between 2012 and 2017, and analyzed this using Pearson product-moment
correlation coefficient on such ERM variables as return on assets, retention, underwriting, cost to
income, leverage, claims, contingency reserve, liquidity ratios. The data obtained was analyzed using
descriptive statistics and a regression analysis was used to estimate any significant influence between
life insurance companies ERM adoption and their financial performance. The findings revealed that
there is a joint cause relationship between ERM variables and financial performance, as each
variable predicted the dependent variable although individual predictors differ. It also indicated
that ERM implementation is not robust so as to effectively mitigate risks. Regulatory agencies should
enforce its directives on the industry to improve ERM framework and attract more investment in the
industry. Further studies could also be done to ascertain the impact of ERM on insurance firm’s
stocks and equity, and the effect on investors’ confidence.
KEYWORDS: Enterprise risk management, insurance company

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