DETERMINANTS OF DEBT MATURITY MIX IN NIGERIA INSURANCE COMPANIES

ABSTRACT

This study seeks at investigating the determinants of debt maturity mix in Nigeria insurance companies. The study was carried on 15 Insurance Companies listed in the Nigerian Stock Exchange as at year ending December, 2019, and covered a panel data for 5 years(from 2015 to 2029). The firm specific determinants indicators were Revenue Growth Rate (RGR), Profitability (PROF), Firm Size (FSZE) and Firm Liquidity (LIQ), while Debt Maturity (DM) was proxy for Debt Maturity Mix. A panel data regression model was specified and estimated using Ordinary Least Squares (OLS) technique. The empirical results revealed that Revenue Growth Rate (RGR) has a significant negative relationship with the Debt Maturity Mix of the Insurance Companies in Nigeria; Profitability (PROF) has a positive but not significant relationship with the Debt Maturity Mix of the Insurance Companies in Nigeria; Firm Size (FSZE) had a negative and statistically significant effect on the Debt Maturity Mix of the Insurance Companies in Nigeria, and Liquidity (LIQ) with a negative but statistically significant relationship with the Debt Maturity Mix of the Insurance Companies in Nigeria for the period under investigation. It was however recommended that since Revenue Growth Rate has a statistically significant effect on the debt maturity mix of the insurance companies in Nigeria, it is highly recommended that the companies should watched their capital combination with utmost care and understand their capital structure mix so as to continually maximize their cost of capital, as debt structure is determined by balancing the optimal cost of debt and the cost of managerial discretion so that it can impact positively on the overall growth of its capital structure among other recommendations.