Enterprise Risk Management Capability, Regulatory and Insurance Market Resilience in Nigeria: An Empirical Analysis under NIIRA 2025

Abstract

This study examines the relationship between enterprise risk management (ERM) capability, regulatory transformation, and insurance market resilience within the context of the Nigerian Insurance Industry Reform Act (NIIRA) 2025. It also developed a conceptual framework illustrating the mediating roles of governance maturity and capital adequacy culture in the relationship between enterprise risk management capability and insurance market resilience within the NIIRA 2025 regulatory context. The study develops and empirically tests a structural model in which governance maturity and capital adequacy culture mediate the relationship between ERM capability and resilience outcomes. Using 20 years of data from 12 composite Nigerian insurance firms, the study employs Partial Least Squares Structural Equation Modelling (PLS-SEM). The results show that ERM capability significantly enhances governance maturity and a culture of capital adequacy, thereby driving insurance market resilience. However, the direct effect of ERM on resilience is not statistically significant, indicating full mediation. The findings highlight that regulatory effectiveness depends on organisational capability rather than compliance alone. The study contributes to the literature by providing empirical evidence from an emerging market and offering policy insights to strengthen risk-based supervision in Nigeria.