Does Consolidation Have any Effect on the Operational Efficiency in Nigerian Insurance Firms?
The effect of consolidation on the operational efficiency in Nigerian insurance firms is being assessed in this study. The model of the study was underpinned by the regulatory and efficient market monitoring hypothesis. The secondary data were gotten from the financial statements of the insurance...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
| Published: |
Danubius University
2019-08-01
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| Series: | Acta Universitatis Danubius: Oeconomica |
| Subjects: | |
| Online Access: | http://journals.univ-danubius.ro/index.php/oeconomica/article/view/5803/5089 |
| Summary: | The effect of consolidation on the operational efficiency in Nigerian insurance firms is being
assessed in this study. The model of the study was underpinned by the regulatory and efficient market
monitoring hypothesis. The secondary data were gotten from the financial statements of the insurance
firms. This study covered the period of years between 2009 and 2016. The Pooled Least Square Method,
Fixed Effect Model, Random Effect Model and Hausman Test were employed as the estimation
techniques. The results of the Random Effect Model showed that capital base is positively significant,
while total assets have negative and insignificant effect on operational efficiency. In addition, liquidity
and total premium have positive and insignificant effect on operational efficiency. Based on the findings
of the study, it is suggested that Nigerian insurance firms should consider assets reconstruction. They
should also ensure that the total premium received is optimally employed in income generating assets.
In addition, the liquid assets, especially cash, should be invested where interests would be earned while
the cash remains easily accessible. Overall, consolidation exerts a significant positive effect on the
operational efficiency of Nigerian insurance firms because the capital base is the most important
element of the consolidation exercise. |
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| ISSN: | 2065-0175 2067-340X |