History of Insurance in Nigeria till date-There is always a starting point to every journey in life. Even our life it self is tied back to an origin. History has it that insurance in Nigeria started even before Nigeria gained independence. The colonial masters are the ones who set the standard of insurance operation in Nigeria.
How did Insurance get started in Nigeria?
Here in mytmoro.com we are committed to providing you tips, reviews and histories about finance and insurance that will make your tomorrow a better one. In this article, we will discuss in detail what insurance is all about, how it works, the importance and the History of Insurance in Nigeria till date.
Back then, European companies carry out their businesses through the process called “Inter-Regional Trade” and because they needed to reduce losses, they came up with a strategy and obtained insurance license from abroad.
Gradually, when their businesses and investment began to grow bigger in Africa and of course in Nigeria, they came up with another strategy in order to retain their authority in the country. This led to the creation of some of the insurance companies you see today in Nigeria. So one can easily trace the rise of the insurance companies in Nigeria to this period.
History of Insurance in Nigeria till date
History have it that In 1918, the Royal Exchange Assurance officially became the first Insurance company in Nigeria. In 1958, The African insurance Company Limited became the second and the rest followed. The like of BEWAX’s Legal and General Assurance, Patterson Zochonis(pz) Liverpool, Law Union and Rock.
So until Nigeria gained Independence in 1960, the major roles in the insurance industry was being played by the European business men. History have it that when Nigeria gained political independence, some of these insurance companies were nationalized.
Gradually, the government began to put up strategy to create their own indigenous insurance companies to avoid pushing money abroad. Eventually, they were able to create their own insurance companies with the help of the United Nation(UN). This is the History of Insurance in Nigeria till date.
The Role Of National Insurance Commission(NAICOM)
We cannot talk about History of Insurance in Nigeria till date and not to mention the National Insurance Commission, NAICOM which is the umbrella body that is responsible for regulating the operation of insurance in Nigeria. The Act which was established in 1997 ensures that they regulate all businesses relating to Insurance.
NIACOM Responsibilities is not just limited to regulating insurance companies alone, it extends even to the policyholders, beneficiaries and third parties.
This implies that if you are a policy holder in one of the insurance companies in Nigeria and the insurance company fails to deliver their promises as stated in your policy certificate, you have the right to report the insurance company to NAICOM and they will be punished accordingly.
Functions of NAICOM in Nigeria Insurance Industry
- They provide and establishes procedures of how insurance business will operate in Nigeria.
- They are the one that will tell insurance companies how much to collect for an insurance premium.
- They act as a mediator between insurance companies and the federal government
- The protects the interest of the government and her citizens
- They act as a regulator between insurers and and policyholders in Nigeria
- They advise the government on insurance related matters
- They approves standards of operation and conditions of insurance business in Nigeria.
- They have the right to publish annual reports and statistics of the insurance industry
- They also contributes to improve the educational standard of Insurance related programs in Nigeria.
- They sanctions any insurance company in Nigeria that failed to deliver their promises as stated in the company’s policy handbook.
- NAICOM also carries out other insurance related functions as stated under the 1997 Act.
Governing Board of NAICOM
A section of the 1997 Act that governs NAICOM mandates that the commission would have a Governing Board members to pilots the affairs of the commission. The Board members are:
- A part time Chairman.
- The commissioner for Insurance
- Two deputy commissioners for Insurance
- One representative from the Ministry of Finance (rank of Directors)
- One Representative from Central Bank of Nigeria(CBN) (Rank of Directors)
- One representative from Insurance institute of Nigeria (CIIN)
- One representative of the ministry of Trade and Investment
- Three part time members to represent the interests of the general public.
Tenures of the Board Members
The board members are expected to spend a specific year in the office. Of cures there is no permanent position in some government organization. Below are the years each member of the board is expected to spend in the office.
The Commissioner For Insurance
The commissioner for Insurance is expected to spend 4 years in the office and may be reappointed for a another 4 years and no more.
Deputy Commissioner (Technical)
The Deputy commissioner Technical is expected to spend 5 years in the office and may be reappointed for another 5 years and no more.
Deputy Commissioner (Finance and Administration)
The Deputy commissioner finance and administration is expected to spend spend 5 years in the office and may be reappointed for a another 5 years and no more.
Operational Management at NAICOM
The Management of NAICOM operates under three divisions. Below are the list under which they operates.
1. Commissioner for Insurance’s Division
- Legal and Board Secretariat
- Corporate Affairs
- Information Technology
- Research, Statistics, and Corporate Strategy directorate
2. Technical Division
- Inspectorate Directorate
- Authorization and Policy Directorate
- Supervision Directorate
- Enforcement and Compliance Unit
- Complaint Bureau Unit
3. Finance and Administration Division
- Finance and Accounts
- Administration and Human Resources
The NAICOM office address is at 1239, Ladoke Akintola Boulevard in Garki II; Abuja.
What is Insurance and how Does it work?
Insurance is a contract agreement that provides protection for individual or organization against unforeseen events.
The truth is that the world we live in is full of uncertainties, no body know what the next minutes hold. In order to protect ourselves from these unexpected events, the business world introduced Insurance so that we can be covered against unexpected events that may come our way.
What are Importance of Insurance to an Individual?
- provides safety and security to an individual.
- Anyone can fall a victim of critical illnesses, health insurance is a policy that protects individual against any type of health risks.
- Insurance companies helps to grow the GDP( Gross Domestic Products) of a country, there by promoting economic growth of that country.
- They also provides employment/job opportunities.
- Reduces risks and provides peace of mind to an individual and businesses.
Types of Insurance Policies
There are many types of Insurance Policies offered by different Insurance companies. The type of services you are looking for would determine the type of policy to sign up for. As we always advice you on my mytmoro.com, make research to know the type of policy that suit the kind of service you are looking for.
Here are some major policies offered by Insurance companies
- Life Insurance policy plan
- Business Insurance policy
- Investment Insurance Policy
- Car/auto Insurance policy
- Aviation Insurance policy
- Health Insurance policy
- Home Insurance Policy
- Engineering Insurance policy
- General Insurance Insurance
How to Get Insured
The process below will guide you on how to sign up for insurance from start to finish.
- Make list of the items or beneficiaries you want to insure.
- Make research to find out the insurance companies that offers the kind of policy or service you need.
- Get the company’s quotes or requirements from a broker or directly from the company.
- Sign up through their online platform or Contact the company’s agent via their online platform or better still visit the company’s physical address and get yourself registered.
Frequently Asked Question
What is Insurance Premium?
Premium is a price of a particular insurance policy usually expressed as a monthly or yearly cost. Premium is usually determined by an insurance company based on the risk associated to the policy you signed up for. Different Insurance companies may charge different Premium for similar policies.
What is Insurance Policy?
Policy is a proposed service an Insurance company agrees to give its customers. It is a plan of what to do in a particular situation that has been officially agreed between an Insurance company and their clients.
What is Insurance Policy Limit?
Policy Limit is the maximum amount an Insurance company can pay on a single policy in the event of lost or damages associated to that particular policy.
What is Insurance Deductible?
This is the amount a policy holder must pay to the insurance company before claims are paid. Deductibles is usually calculated based on each policy or sometimes per claim depending on the insurance company.
What is Insurance Claims?
Claim is a written request to an insurance company to pay you the agreed sum in the event of any lost or damages to the property you insured.
Insurance Companies on the Nigerian Stock Exchange
Haven discussed the History of Insurance in Nigeria till date earlier, let’s talk briefly on the Nigerian Stock Exchange (NSE) Other wise known as Nigeria stock group(NSG) which is a financial body responsible for regulating stock, trade and movement of cash in Nigeria.
One of the main duties of the group is to provide access to capital especially to companies who want to expand their business. Their services are not just limited to Nigeria only, but also to both regional and international investors. The Security Exchange commission(SEC) is the body that regulates the Nigeria Stock Exchange since it was created in 1961.
Categories of the Nigeria Stock Exchange
The Nigeria Stock Exchange have three categories in which they list companies:
- The premium Board. They are known as the top level companies in Nigeria based on the company’s market size.
- The elites group of companies. These group of companies are also large but not to the profit and market size of premium board companies.
- The smaller and high-growth emerging companies. This is known as the lowest level yet growing companies.
Which insurance company is the best in Nigeria
There are many Insurance companies in Nigeria that helps people who want to protect their lives and properties against unforeseen circumstances. However, some of these insurance companies renders special kind of services to their clients.
This implies that the services you want for yourself will determine the type insurance company to sign up for. So it is advisable to always make a research to know the particular insurance company that renders the kind of service you are looking for.
In this article, we will list the top ten (10) best insurance companies in Nigeria and the type of services they offers.
This review is based on:
- The company’s image(the track records of the company base on popular news and government accreditation).
- The financial strength and price factor of the company
- Certified and Legal accreditation by the government.
Incase you are searching for an insurance company to sign up for, you should consider the above stated factors. It is also advisable to go through stock ratings and business recourses to get more information about a particular company that you want to sign up for. This will give you full confidence of what you are about to go into.
Top 10 best Insurance Companies in Nigeria
- AIICO Insurance plc
- Lead Way Insurance company
- Custodian and allied Insurance
- Cornerstone Insurance plc
- AXA Mansard Insurance
- African Alliance Insurance plc
- Goldlink Insurance plc
- Continental Insurance
- Industrial and General Insurance
- Lasaco Assurance plc
The Roles of Insurance Companies
- Provides safety and securities to individuals and organizations
- Provides financial support and reduces uncertainties to individuals and businesses
- Generates fund by way of premium from their policy holders
- Promotes economic growth of a country
- provides employment opportunities
- Reduces lost and risk to its policy holders.
Apart from protecting people from potential losses and unexpected risk, insurance companies also help to grow our economy . It is advisable to sign up to an insurance company so that you can have a peace of mind knowing fully well that your risks are covered
15 Reasons why you need an Insurance Coverage
If you looking for an Insurance policy that will cover your business or your properties or you are new in insurance business and you want to know more about insurance industry especially in Nigeria. This article is for you.
Many people ignore the fact that death is inevitable. The truth is ” no one knows what the next second would give birth to” Yeah, it’s a bitter truth, we often ignore the fact that we live in a world of uncertainties.
Do you often think of what will happen to your loved ones when you die? Does it cross your mind that accident does not ring bell? or that you can be out from home one day and all of a sudden a call will come through telling you that your multimillion naira house has been raised down by fire?
In as much as we don’t pray for such bad events to happen to us, it is also advisable to protect ourselves should in case we fall a victim of one of these unexpected circumstances. With these been said, i bring to you 15 solid reasons why you should sign up for insurance policy especially in Nigeria.
You may also like to read: How to Write Job Contract Agreement Letter-Samples
Top 15 Reasons why you need Insurance policy
- Having an Insurance policy can save a business if the key person dies
- Insurance coverage is a big supplement to your retirement plan. At least you have something to fall back on when the strengths of your youth are not longer there.
- I’m sure you wouldn’t want to die and leave your children or your loved ones with just a few naira in your bank account. Get insurance and save them from future hardship.
- Your children can not inherit your job when you die, so even if even your work place has provided you insurance, it is advisable you get your own policy for the benefit of your family because in as much as they cannot inherit you job, they cannot inherit your insurance coverage as well.
- Regardless of your careful and smooth driving, accident can still happen. To that effect, you need insurance to protect you car against unexpected crash.
- Some Insurance policies also covers car theft. You need a policy to cover your car in the event that bad guys snatched it from you. Insurance company can replace your car when you request a claim that your car has been stolen.
- Because the world we live in is not predictable, you need insurance to cover any unexpected events that may rise.
- Because it is a law in some countries, and I hope as a law abiding citizen, you wouldn’t want to break the law of your country. For instance in Nigeria, Motor insurance is compulsory. I know most people do not know because not everyone can afford a car in my country, now you know.
- Having insurance gives you peace of mind and self confidence.
- Insurance company can fix your house in the event that fire got the house.
- We are prone to sicknesses, anyone can be a victim of one sickness or the other or accident can happen at any time, it may be when you do not have enough cash at hand. Insurance can be of help when such unexpected ailment come up.
- Bad guys can break in to your home and take your valuables, if you signed up for a burglary insurance with an insurance company, you are in save hand.
- Even your mobile devices can be insured now in Nigeria against unexpected lost or damage, that’s to show you how important insurance policies are in this 21st Century.
- Are you aware that there is an insurance policy now in Nigeria that can pay your school fee from start to graduation? I know most of us do not know, now you know so get yourself ready and grab yourself a policy that will assist your studies.
- Even your electronic gadgets and home appliances can be insured now. So get yourself or you properties insured so that you can have peace of mind knowing that your tomorrow is protected.
This is a brief History of Insurance in Nigeria till date. Since life is not predictable, the best gift you can give yourself is getting yourself insured against any unforeseen events. No one knows tomorrow, so get prepared against what tomorrow will bring.