IDENTIFYING ZOMBIE FIRMS IN NIGERIAN INSURANCE SECTOR
IDENTIFYING ZOMBIE FIRMS IN NIGERIAN INSURANCE SECTOR

Summary/Abstract: This paper adopted the definition of a zombie firm as an old firm (aged 10 and above) that make losses in three consecutive years to identify zombie firms in the Nigerian Insurance sector for the period 2005 – 2015. In this study the twenty-four (24) listed insurance firms in the Nigerian stock exchange as at 31st, December 2015 was analyzed with a view to ascertaining if there are zombie firms in the insurance sub-sector. The findings show that seven (African Alliance Insurance, Goldlink Insurance, Guinea Insurance, Linkage Assurance, Niger Insurance, SUNU Assurance Nigeria and Wapic Insurance) out of the twenty-four insurance firms listed in the Nigerian stock market are zombie firms. Thus, the study established that 29.2% of the quoted insurance firms in Nigerian stock market were zombie firms during the period 2005–2015. After assuming the Zombie status, Linkage Assurance, Niger Insurance and Wapic Insurance recovered and have returned to profitability while African Alliance Insurance, Goldlink Insurance, Guinea Insurance, SUNU Assurance Nigeria were not consistent in their return to profitability. The study therefore recommends that there should be early restructuring aim at reducing the spending of zombie firms. Also, Zombie firms should embrace modern technology to gain competitive advantage and should be innovative in their product design.

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