IMPACT OF FINANCIAL CRISIS ON INSURERS (A STUDY OF SELECTED INSURANCE COMPANIES IN KWARA STATE)

ABSTRACT This paper examines how financial crises affect the performance and stability of the chosen insurance firms in Kwara State, Nigeria. In particular, it analyses the impact of credit, liquidity and underwriting risks on insurers in times of distress and the effectiveness of their risk-management and regulatory responses. The descriptive survey design was used with a sample size of 150 respondents who were selected among the staff and policyholders of AIICO Insurance Plc, LEADWAY Assurance Ltd and STACO Insurance Plc. The information was gathered through structured questionnaires and analyzed through descriptive statistics and correlation in SPSS. The results indicate that financial crises significantly reduce the profitability, solvency, and trust of the customers towards insurers. The most important challenge was credit risk, which was caused by default on the premiums and failure of the counterparties, then liquidity and underwriting risks. The paper also shows that diversification, reinsurance, and well-developed internal controls are effective risk-management tools that help to reduce these impacts, but only under favourable economic conditions and with proper regulation. In sum, the strength of Kwara State insurers lies on strong financial risk management, proactive regulation by NAICOM and increased trust among the population on insurance system. It is advisable to implement more robust credit and liquidity systems, improve underwriting, tighten regulation, and increase publicity campaigns to increase insurance coverage