Financial Consolidation and Financial Performance of Insurance Companies in Nigeria

Abstract

The research investigated the effect financial consolidation has on the performance of Nigerian insurance firms covering the period 2011 to 2022 utilizing the feasible generalized least squares (FGLS) on selected five insurance organizations. Key variables used in the analysis included financial consolidation measured by merger and acquisition (M&A), Herfindahl-Hirschman index (HHI), and concentration underwriting capacity (CUC), while performance was captured by equity return (ROE). Findings revealed that M&A and HHI both positively and significantly affect ROE. However, CUC had positively insignificant effect on ROE. The study then recommended that policymakers and industry stakeholders should focus on improving financial consolidation to support economic growth and improve firm-level performance.