Effect of Interest Rate on Profit of Insurance Companies in Nigeria

This study investigated the effect of interest rate on profit of insurance companies in Nigeria insurance industry. Ex-post facto research design was used in the study. A hypothesis was formulated and tested. The data was subjected to a Unit root test. Afterwards Ordinary Least Square Regression analysis technique was used to test the hypothesis. The analysis of the study was at 5% level of significance. It was found interest rate had a positive and insignificant individual effect on total profit of the Nigerian insurance industry. The following respective implication of the finding shows that Interest rate can reduce the returns of its investment. The study based on the aforementioned finding we conclude that the insurance business profit margin is not significantly but positively influenced by interest rate. The researcher recommends that insurers have to build and hold reserves over a long time horizon, which makes investment, returns an important part of overall earnings.