Background: The Insurance sector is ladened with the sole responsibility of risk bearing and management. This is very important to any economy especially the developing economies like Nigeria where there is absence or little presence of enabling environment for businesses, low life-expectancy and wavering government policies. It is also important for the Insurance sector to stay alive to perform the duty of rescuing the economy from peril. For the sake of sustainability, Insurance companies must decide on what processes to focus on to drive profitability. Objective: The aim of the present study is to examine the significant effect of three important concepts in insurance: Net Premium, Net Claims and Underwriting Risk as predictors of profitability. Methods: The data used was extracted from the NAICOM annual publication between years 2010 to 2016. All data for available insurance companies published in the NAICOM report were used. Three models were fitted from multiple OLS and the stepwise regression analysis. Results: Net claims and underwriting risk were significant predictors of profitability (p< 0.05) while the net claim is a negative confounder and not significant at predicting profitability of insurance companies (p> 0.05). Conclusion: The profitability of Nigeria Insurance companies within the examined years have been driven significantly by Net claims and underwriting risks while net premiums was not a determinant of profitability. Nigeria Insurance companies must pay attention to their risk assessment systems and not only the drive for premiums or sales.
