RISK UNDERWRITING PROCESS AND SUSTAINABILITY OF NON-LIFE INSURANCE COMPANIES IN NIGERIA

Insurance companies try to strike a balance between policyholder wants and business sustainability goals by carefully evaluating risks and setting prices. Insurance underwriting process in Nigeria faces several challenges that hinder its effectiveness and sustainability. The study examined the influence of risk underwriting process on sustainability of non-life insurance companies in Nigeria. A descriptive research design was adopted for the study through the administration of questionnaire. The population of the study comprised employees of non-life insurance companies in Nigeria and purposive sampling technique was used to select 200 employees from top ten insurance companies. 184 copies of questionnaire returned were administered for the study. The study used both descriptive and inferential statistics of linear regression to test the hypotheses at 5% level of significant of the study. The hypothesis result revealed that risk survey has significant effect on sustainable underwriting of non-life insurance companies in Nigeria at F= 42.804; R= 0.436, R2= 0.230, Adj.R2 = 0.186, t= 4.543, P(0.000) <0.005). Also, risk pricing significantly influences sustainable underwriting of non-life insurance companies at F= 10.843; R= 0.237, R2= 0.156, Adj.R2 = 0.151, t= 8.573, P(0.001) <0.005). Finally, risk selection contributes positively but insignificant to sustainable underwriting of non-life insurance companies at F= 24.146; R= 0.342, R2= 0.117, Adj.R2 = 0.112, t= 12.662, P(0.000) <.05). The study concluded that there is positive and significant relationship between risk survey, risk pricing, and sustainable underwriting, while there is positive but insignificant relationship between risk selection and sustainable underwriting of non-life insurance companies in Nigeria. The study recommended that insurance risk pricing, risk survey and risk selection should be strengthened in order to increase sustainable underwriting of non-life insurance industry in Nigeria.