INFLUENCE OF LEVERAGE CAPITAL ON QUOTED INSURANCE COMPANIES' PERFORMANCE: EVIDENCE FROM NIGERIA

The aim of this study was to examine the Influence of leverage capital on profitability of quoted Insurance Companies in Nigeria. Secondary data was used for this study; data were obtained from the Nigerian stock exchange (NSE) and annual financial statements of quoted insurance companies. Graphs and panel data fixed effects regression analysis method was used for analysis. The financial statements of ten (10) insurance companies covering a period of eleven years (2009 to 2013) were sampled. The results showed that panel data fixed effect regression analysis indicated that leverage and size does have significant effect on profitability of Insurance companies in Nigeria. The study concluded that leverage and size does influence profitability of Insurance Companies in Nigeria positively. Based on the above findings, the study therefore, recommend that for insurance companies to increase profitability they should take on more leverage, seek to increase size either by internal growth or external by merger or acquisition because size does influence performance and that top management of every Insurance company should make prudent financing decision directed towards maintaining a high leverage level in order to remain profitable.