Title:
Effect of Financial Policies on Shareholders’ Wealth of Quoted Insurance Companies in Nigeria

Authors:
AINA, Hannah Egbetooki and JACOB, Zaccheaus, Nigeria

Abstract:

This study aims to examine the effect of financial policies on the shareholders’ wealth of quoted insurance companies in Nigeria. Data were collected from the annual financial reports of each insurance company and the Nigerian Exchange Group Factbook. The study utilized panel regression to analyse the data from a sample of six (6) quoted insurance companies on the Nigerian Exchange Group (NGX) from 2016 to 2021. The results of the panel regression revealed that the dividend payout ratio and debt-to-equity ratio have a significant effect on the shareholders’ wealth of the selected quoted insurance companies in Nigeria. The study recommends that insurance companies should increase their dividend payout, especially in the wake of a 200% increase in the third-party vehicle insurance policy by the National Insurance Commission as this will increase shareholders’ wealth and boost the investor’s confidence in the sector. Also, insurance company management should have a balanced capital structure between debt and equity such that it will not hamper the continuity of the business and will not over-dilute the equity of the shareholders.

DOI: https://doi.org/10.51505/IJEBMR.2024.8501