A Qualitative Analysis of the Impact of Capital Adequacy on Managerial Effectiveness: A Case Study of Selected Insurance Firms in Nigeria

Abdurahmon Onaolapo, Kehinde Agbolade Obasan, Yusuf Aina Soyebo


Financial capital is an essential tool in any sustainable business but the peculiar nature of Insurance business position capital more in the context of underwriting capacity. However, despite increase in the emergence of business opportunities and clients due to technology’s improvement, availability and increasing adoption rate, there are countless challenges in the undertaking and successfully execution of feasible business due to inadequate capital required to exploit the various opportunity in the environment. Using a descriptive analysis, regression and the Pearson correlation coefficient on a primary data obtained through a structured questionnaire administered to Hundred (100) staff of selected Insurance companies in Nigeria, this study provides a qualitative analysis of the impact of capital adequacy on managerial effectiveness. It revealed that capital is an essential tool in business formation and continuity which prompts the realization of business objectives while its insufficiency can preempt organisation goal realization in the insurance industry with a correlation value of 0.584 indicating the existence of a positive relationship between capital adequacy and managerial effectiveness. Hence, it is recommended that in order to attract and enjoy the potential opportunities offered by the provision of adequate capital in the insurance industry, operators must come to terms on the overall size of capital requirement as a basis for creating a supportive and enabling business support system that fosters management culture, performance and practice.


capital, adequacy, management, effectiveness

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DOI: https://doi.org/10.11634/216796061706139

American Journal of Business and Management

ISSN 2167-9606  eISSN 2167-9614 //OCLC: 794280070

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