THE EFFECTS OF FIRE INSURANCE PREMIUM RATING ON CLAIMS SETTLEMENT AND INVESTMENT PORTFOLIO OF INSURERS IN PRE-COVID ERA: THE NIGERIA EXPERIENCE

Abstract

This study examines fire insurers in Nigeria's pre-COVID market, the study focus on their ability to accurately assess risks.setting premiums rating, investment portfolio and manage claims efficiently. Effective claims and investment management are key to maintaining the financial stability of fire insurers, particularly in high-risk markets. The research utilized secondary data from the audited financial statements of 15 licensed general insurance companies in Nigeria, covering a 20-year period (1999-2018). A purposive sampling technique was employed to select the sample, based on the researcher’s judgment. Data analysis incorporated inferential statistics, including multiple regression and fixed/random effects models, to test empirical relationships across four hypotheses. The findings revealed a strong association between insurance premium ratings and premium income, with claim settlement positively influencing premium ratings. Furthermore, the study established significant links between adequate premium rating, investment portfolios, profitability, and capital adequacy of property insurance firms in Nigeria. The study recommends enhancing data accessibility and strengthening regulatory frameworks to improve the overall performance and stability of the fire insurance sector.