Enterprise Risk Management (ERM) Practices and Efficiency in Non-Life Insurance Firms in Nigeria

Sewhenu Francis DANSUa DANSU; Ismaila Owolabi SAFIU; Adebola Ayoke OGUNDOWOLE

Sewhenu Francis DANSU Department of Insurance, Faculty of Management Sciences, Lagos State University, Lagos
Ismaila Owolabi SAFIU Department of Insurance, Faculty of Management Sciences, Lagos State University, Lagos
Adebola Ayoke OGUNDOWOLE Department of Insurance, Faculty of Management Sciences, Lagos State University, Lagos

Keywords: Enterprise risk management (ERM), insurance, non-insurance firms, underwriting, claims management

Abstract

This study examines the effect of enterprise risk management (erm) practices on the technical efficiency of non-life insurance firms in Nigeria. Using efficiency theory as a framework, the study examines the impact of three ERM dimensions on underwriting management and claims management, including strategy, operations, and compliance. The data from ten purposively selected non-life insurers were analysed using a pooled Ordinary Least Squares (OLS) regression, with post-estimation diagnostics, within a panel research design. Based on the study's results, ERM had a significant impact on claims management but a weak, statistically insignificant impact on underwriting management. Based on the study's results, Nigerian non-life insurers appear more operationally than strategically focused in their ERM practices. This study contributes to the ERM literature by linking ERM to technical efficiency rather than traditional profitability measures. The paper provides policy implications for regulators and managerial recommendations for integrating enterprise risk management into strategic decision-making processes.