ABSTRACT

 This study examined the effect of non-life policy’s premium income on investment portfolio of Nigerian insurance industry from 1987 to 2011. Secondary sources of data extracted from National Insurance Commission’s Annual Financial Statements and Central Bank of Nigeria's Statistical Bulletin were used. Analysis of data was done with the help of e-Views Statistical Package using multiple log linear regression models to examine the effect of the explanatory variables on the dependent variable for the period under review. From the regression results, the R- Squared is 0.93455. This means that 94% of the changes in dependent variable is explained by the changes in the independent variables. Major findings of the study include that motor policy premium income has positive and significant effect on investment portfolio of Nigerian insurance industry. The study also found that marine insurance policy has no significant effect on the investment portfolio of Nigerian insurance industry. The study recommended that Government and insurance regulatory authorities should improve on the premium income generation of the insurance firms in order to contribute meaningfully to the growth of the economy through enforcement of the compulsory insurance policies. In addition, stringent measures should be taken against insurers and their employees that indulge in unethical practices such as premium rate cutting, delay and denial of genuine claims settlement.