Reinsurance Transactions and Gross Premium Income of Non-Life Insurance Companies in Nigeria - An ARDL Approach.
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Date
2023
Authors
Fadun, O. S., Aduloju, S. A., & Oluwaleye, T. O.
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Abstract
The study examined the relationship between reinsurance premiums ceded and gross premium income and the effect of reinsurance premiums accepted on the gross premium income of Nigerian non-life insurance providers. This study is a longitudinal research design. We engaged secondary data extracted from the Nigeria Insurance Association (NIA) Digest’s report for all the non-life insurers from 2007–2021. The data was analysed using descriptive statistics and auto-regressive distributed lag (ARDL). The results revealed that reinsurance premium ceded has a significant positive relationship with gross premium income, and reinsurance premium accepted has a significant positive effect on the gross premium income of Nigerian non-life insurance providers. It was also confirmed that reinsurance premium ceded and reinsurance premium accepted have a short- and long-run effect on the gross premium income of Nigerian non-life insurance providers. This study established that reinsurance transactions significantly positively affect the gross premium income of Nigerian non-life insurance firms. Therefore, this study recommends, among others, that Nigerian non-life insurance providers should improve their underwriting capacity, especially for high-risk sectors like oil and gas, marine, and aviation, as well as other sectors, to increase their gross premium income.
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Fadun, O. S., Aduloju, S. A., & Oluwaleye, T. O. (2023). Reinsurance Transactions and Gross Premium Income of Non-Life Insurance Companies in Nigeria: An ARDL Approach. The Journal of Accounting and Management, 13(3), 75-89.