RISK BASED SUPERVISION AND THE ENHANCEMENT OF THE GROWTH OF THE NIGERIAN INSURANCE INDUSTRY

Abstract

The insurance sector in Nigeria has faced regulatory and structural losses requiring more efficient supervisory measures. Risk-Based Supervision (RBS) is a new regulatory framework that is aimed at the identification and mitigation of risks to assure the stability of the industry and sustainable development. The primary aim of the study is to analyze the anticipated role that the introduction of risk-based supervision would play in influencing the development of insurance operators in Nigeria, hence, improving the stability of the sector. The design of the research was quantitative. Structured questionnaires were used to collect data on employees of six purposely chosen insurance companies in Lagos Island, Lagos State. Among 300 sent out questionnaires, 189 out of them were valid and analysed. Descriptive statistics and Chi-Square Goodness of Fit tests as well as simple regression analysis of the Statistical Package of Social Sciences (SPSS) were used in the study. In the initial hypothesis, many respondents felt that RBS would support industry growth. The third hypothesis established a positive, strong and statistically significant correlation between RBS adoption and insurance operator growth. The paper concludes that risk-based supervision should be adopted to enhance regulatory control and the sustainable development of insurance companies in Nigeria.