ACTUARIAL SCIENCE AND INSURANCE

This study examines the impact of credit risk modeling techniques on the performance of life insurance companies in Nigeria., focusing on a sample of 12 life insurance companies in Nigeria over the period 2018 to 2024. The variables analyzed included credit scoring, structural model and Altman Z-score model. Various statistical and econometric tools were applied to analyze the data. The findings revealed that credit scoring and Altman Z-score model have positive and statistically insignificant effects on the financial performance of life insurance companies in Nigeria, while the structural model has a negative and statistically insignificant influence on the financial performance of life insurance companies in Nigeria. Based on these findings, the study recommended that life insurance firms in Nigeria strengthen the adoption and integration of credit scoring systems using advanced data analytics and artificial intelligence and firms should review and customize structural models to better suit the operational and regulatory environment of the Nigerian insurance industry.

The study examines the firm specific determinants of the performance of insurance firms in Nigeria over the period 2019 – 2023, using descriptive statistics, correlation analysis and panel least squares regression techniques. A causal research design was adopted for the study. The firm specific factors considered in this study include firm size, capital adequacy, leverage, liquidity and firm age while insurance firm performance was proxy by return on asset. It adopts a multivariate panel least squares analysis for the estimation process. The finding of the study reveals that firm size, liquidity and firm age has a positive and insignificant effect on performance of insurance companies while capital adequacy and leverage has a negative and insignificant influence on performance of insurance firms. The study recommends among others that management of insurance firms should focus less on growing the size of insurance firms in Nigeria. Also, regulatory authorities should ensure that insurance firms comply strictly with capital adequacy set by the regulatory authorities.

The main aim of the study is to explore the impact of cash flow management on insurance firm profitability. Specifically, the study aims to examine the relationship between operating activities and insurance firm profitability, examine the relationship
between investing activities and insurance firm profitability, and to examine the relationship between financing activities and insurance firm profitability, using panel data covering the period 2013–2022. In this study, cash flow from operating activities, cash flow from investing activities, and cash flow from financing activities are employed as the main independent variables, while profitability is measured using return on assets. To achieve the objectives of the study, pooled Ordinary Least Squares regression was initially estimated, followed by diagnostic tests for multicollinearity and heteroscedasticity. Preliminary analyses, including descriptive statistics, normality tests, and Spearman rank correlation analysis, were also conducted to understand the distributional properties and associations among the variables. Given the presence of heteroscedasticity, robust regression techniques were employed to ensure reliable statistical inference. The empirical findings with respect to each specific objective of the study are summarized as follows. Cash flow from operating activities [coef. = 13.818 (0.000)] has a positive and statistically significant effect on the return on assets of the selected insurance firms in Nigeria during the period under study. This indicates that insurance firms with stronger operating cash inflows tend to record higher profitability. Cash flow from financing activities [coef. = –7.187 (0.048)] has a negative and statistically significant effect on the return on assets of the selected insurance firms in Nigeria during the period under study. This finding suggests that increased reliance on financing activities is associated with
lower profitability among the sampled insurance firms. Cash flow from investing activities [coef. = –7.117 (0.000)] has a negative and statistically significant effect on the return on assets of the selected insurance firms in Nigeria during the period under
study. This implies that higher investment-related cash outflows are associated with reduced profitability in the short run. The study recommend that insurance firms should strengthen the management of cash flow from operating activities by improving underwriting discipline, premium collection processes, and claims settlement efficiency. Corporate managers and directors are responsible for implementing robust internal controls and operational monitoring systems, which will enhance operating cash inflows and support sustained profitability. This will also improve investor confidence and enhance firm valuation