NON-CURRENT ASSETS INVESTMENT AND FINANCIAL PERFORMANCE OF LISTED INSURANCE COMPANIES IN NIGERIA

Abstract

More often than not, insurance firms, like every other business organization are faced with decisions to investment more or less in non-current assets with attending challenges. It is contentions whether adequate or poor investment in non-current assets can give rise to adequate returns to such firms. To that end, this study investigated the relationship the relationship between non-current assets investment and financial performance of listed insurance companies in Nigeria between ce2015 and 2020. The study sought to ascertain relationship between plant & machinery investment and return on capital employed, investment properties and return on capital employed, the relationship between intangible assets investment and return on capital employed. Three hypotheses guided the study. The study was an ex post facto research design. The population of the study was 13 listed insurance companies in the Nigeria Exchange Group were sampled to 8 using purposive sampling technique. The data used in this study were sourced from annual reports and statement of accounts of the selected companies. Plant & machinery investment, investment properties and intangible assets investment were employed as the independent variables while return on capital employed was employed as the dependent variables. Descriptive statistics, unit root test and ordinary least Square multiple regression were employed in analyzing the data with the aid of E-View 10. The study found that plant and machinery investment has positive and statistically significant relationship with return on capital employed of listed insurance companies in Nigeria. The study further found that investment properties has negative and significant relationship with return on capital employed of listed insurance companies in Nigeria. Finally, the study further found that intangible assets investment has negative and insignificant relationship with return on capital employed of listed insurance companies in Nigeria. Based on the foregoing, the study concluded that non-current assets investment has negative and significant relationship with financial performance of listed insurance companies in Nigeria. The study recommended amongst others that insurance companies in Nigeria should sustain their investment in plant and machinery to enhance profitability.