Effect of Risk Mitigation on Profitability of Insurance Industries in Nigeria

Abstract

Risk management plays a critical part in every organization‘s profit maximization through risk cost minimization for wise protection, which cannot be overstated. Risk mitigation (rmt), risk monitoring (rmn), risk management environment, procedure, and policies (epp), and risk measurement (rme) in relation to the profitability of the insurance industry in Nigeria were randomly selected from a wellstructured 5-point Likert scale questionnaire ranging rom ‘5 strongly agree‘ to ‘4 agree‘, ‘3 undecided‘ to ‘1 strongly disagree‘. Using the StataSE 14 statistical software, one hundred and twenty (120) questionnaires were recovered from respondents, accounting for 83 percent of the total questionnaires sent using the multiple regression statistical methodology. Risk reduction and risk monitoring have a considerable impact on the profitability of insurance companies in Nigeria, according to the findings. As a result, it concluded that risk mitigation and monitoring are important factors in determining industry profitability, and those insurance regulators should work to ensure that risk identification, assessment, measurement, and control mechanisms are implemented in accordance with best global practices in order to avoid financial crises and improve insurance performance.