Effect of Leverage on the Profitability of an Insurance Company in Nigeria: A Study of Consolidated Hallmark Insurance Plc.

• Post by: airjournal
• October 5, 2022
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ABSTRACT

This study investigated the effect of leverage on the profitability of an insurance company in Nigeria: a study of Consolidated Hallmark Insurance Plc. The specific objectives of the study were to examine the effect of Debts-to-Assets ratio on Earnings per Share of Consolidated Hallmark Insurance Plc and to assess the effect of Debts-to-Equity ratio on Earnings per Share of Consolidated Hallmark Insurance Plc. Data was generated from the annual reports of the company. The period of the study was from 2016-2020. Multiple regression techniques were applied in the analysis of data. It was found that Debt-Asset ratio had no significant impact on Earnings per Share of Consolidated Hallmark Insurance Plc. Also, Debt-Equity ratio had no significant impact on Earnings per Share of Consolidated Hallmark Insurance Plc. In line with the findings, it was recommended that the company should maintain the status quo of not deepening its leverage practice. Instead, the company should deepen more on its Contingency reserve and statutory reserve in adjusting its capital balances.

Keywords: Insurance Company; Consolidated Hallmark Insurance Plc.; Profitability; Leverage

Authorship: Okparaka, V. C. PhD & Uduak, O. I. | FULL PDF