Nigerian Journal of Banking and Financial Issues (NJBFI)

OPERATIONAL LOSS, AND UNDERWRITING PERFORMANCE OF LIFE INSURANCE COMPANIES IN NIGERIA

Abstract

The Nigerian life insurance industry faces persistent challenges in maintaining stable underwriting performance amid rising operational inefficiencies and unpredictable claim patterns. Despite its crucial role in financial stability, limited empirical research has examined how operational loss influence underwriting profitability within a risk management framework. This study investigates the impact of operational loss on the underwriting performance of life insurance companies in Nigeria. Using panel data from eight life insurers covering the period 2012–2024, the research employed robust regression techniques to mitigate the influence of outliers and ensure reliable estimation. Descriptive statistics revealed significant variability in underwriting profits and premiums, reflecting disparities in business scale and efficiency across firms. Diagnostic tests indicated no severe multicollinearity, heteroscedasticity, or autocorrelation, thereby validating the suitability of panel regression analysis. The findings reveal that operational loss has a statistically significant negative effect on underwriting performance, implying that inefficiencies, governance weaknesses, and internal process failures diminish profitability. The study contributes to actuarial and risk management literature by highlighting the implications for underwriting sustainability. The study underscores the necessity for Nigerian life insurers to strengthen internal control systems, improve data-driven claims forecasting, and adopt integrated enterprise risk management frameworks.