Asset portfolio decision making process of Nigerian insurance companies
Asset configuration of Insurance Companies is crucial to their efficient management since the
diversification it implies is vital for the dispersion and atomisation of risks underwritten.
Asset portfolio decisions are important to Insurance Companies because they conciliate between rarely
converging and often conflicting goals, security, liquidity and profitability.
This study examines asset portfolio decision making process of Insurance Companies in Nigeria. The
current study, aims to identify and develop integrated investment decision concepts guiding and
influencing the asset portfolio decision process.
Prior literature on asset portfolio decision making in Nigeria is sparse and focussed principally on
classical models of decision making with inadequate metrics for quantifying risks, questionable and
impracticable methods and data. The main problem of the portfolio theory, ex-pected utility and most
modem theories of risks is that they regard risks in terms of standard deviations, variances, decision
weights and co variances whereas risks can be defined in many ways and terms in different situations
They fail to account for many facets of decision making by reflecting on rational and normative models
that treat investment decision making as highly structured and formalised. By contrast, decision making
and risk assessment are multi criteria processes that cannot be defined by rigid quantitative models thus
highlighting the necessity to consider decision making by decision makers in their natural settings
(social contexts, political and environment) in the case of this thesis, an Insurance Company.
Decision theory literature together with asset portfolio decisions literature are reviewed and considered
within the contexts of the unit of analysis.
Utilising the qualitative paradigm, the research made use of exrploratory case study of a single
organisation through the application of modified grounded theory methodology to develop six broad
cases of investment decision concepts. The emergent concepts were critique against extant literature
thereby highlighting their similarities and differences.
The thesis introduces new perspectives of decision making by the introduction of the investment decision
concepts influencing asset portfolio decisions of Insurance Companies. Thus, the research specifically
contributes to three areas of research. The first area centred on asset portfolio management six decision
concepts (Consistency of Return, Security, Legal and Regulatory Control, Competency of Management.
Association &Relationships and Stable Environment). The second area is the methodological approach
by situating naturalistic decision making within the insurance sector and the modified grounded theory
employed enhances conventional qualitative research within the financial sector of the Nigerian
The third key area addresses the significance of social relationship, association and specific
environmental issues influencing asset portfolio decision of Nigerian Insurance Companies.