Implication of Ownership Structure of Insurance Companies on Policyholders' Patronage in Nigeria

Abstract

Despite the growing importance of insurance in Nigeria's economy, the industry still faces challenges in attracting and retaining policyholders. One potential factor contributing to this challenge is the ownership structure of insurance companies, which may influence policyholders' trust, confidence, and loyalty. This study investigated the implications of ownership structure of insurance companies on policyholders' patronage in Nigeria, from 2015 to the 2023 financial year. The study’s population consists of the twenty-three (23) listed insurance firms on the Nigerian Stock Exchange as of 31st December 2023. In this study, policyholders' patronage is measured by Premium income. Ownership structure is proxied by managerial ownership, ownership concentration, and institutional ownership. Secondary data was used in the study and was obtained from the annual reports of the insurance companies, the Nigerian Stock Exchange. Panel estimation method involving (pooled OLS, fixed effect estimation, and random effect) was used to test the hypotheses of the study. The fixed effect model demonstrates a strong fit, with key independent variables (MAO, OWC, INO) significantly influencing policyholders' patronage. Therefore, the study recommends careful consideration of the ownership structure and continuous model validation to maintain the effectiveness of insurance firms in significantly stimulating policyholders' patronage.