Industrial Risk Management in Financial Institutions: A Case Study of the Nigerian Insurance Industry

Abstract

Risk management is of great importance in the recent years in Nigeria due to volatility and harsh economic conditions. Insurance companies being risk bearers have continued to play a significant role in the country’s risks management. Thus, this study examined the contributions of risks management in Nigerian Insurance Companies with the aim of highlighting the importance, benefits and the risk management process. It was established that risk management is not a panacea to the problems of developing countries, but it offers potential benefits through its incorporation into the legal, cultural, economic and environmental settings of developing nations. Risk management practices present opportunities of getting rid of risk or hazardous situation. In this regards, there is need for government to design and implement laws to promote effective risk management practices. Also, insurance companies should have working internal controls and sustainable risk management programmes to enhance performance. Therefore, the study concluded that, suitable risk management structure is necessary to facilitate effective and efficient risk management in a developing economy.

Keywords: Risk management, Financial Institutions, Nigeria