📖 ABSTRACT/OVERVIEW
This study investigates the effect of insurance claims fraud on the profitability of selected insurance companies in Nigeria. Insurance fraud constitutes one of the most persistent threats to underwriting profitability in the Nigerian market, manifesting in various forms including false claims, staged accidents, arson, and document forgery. Despite mounting evidence of its financial impact, rigorous empirical studies quantifying the relationship between fraud incidence and firm-level profitability remain limited in the Nigerian context. This research adopts a causal-comparative research design using secondary data sourced from annual financial reports of ten publicly listed insurance companies on the Nigerian Exchange Group (NGX) for the period 2019 to 2023. Fraud-related loss provisions and claims ratios serve as proxy indicators for fraud incidence, while return on assets (ROA) and net profit margin represent profitability measures. The study applies panel data regression to establish the directional and magnitude relationship between fraud exposure and profitability. Preliminary analysis anticipates a statistically significant inverse relationship between claims fraud incidence and insurance company profitability. The research further reviews anti-fraud strategies adopted by sampled firms, including claims investigation units and fraud analytics software. Recommendations target underwriting managers, internal auditors, and NAICOM on strengthening industry-wide fraud detection frameworks. Keywords: Claims Fraud, Insurance Profitability, Nigerian Insurance Industry, Underwriting, Anti-Fraud Measures.
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