History of Insurance in Nigeria
Have you ever wondered how insurance came to be in Nigeria? It’s actually a pretty interesting story. Insurance started out as a way to share risk between people. Back in the day, if something bad happened to someone, their whole community would pitch in to help them out. Over time, people started realizing that it was more efficient to spread the risk around, so they started coming up with ways to do just that. And thus, insurance was born!
The history of insurance in Nigeria can be traced back to the colonial era when the British set up the first insurance company, the National Insurance Company (NIC), in 1892. The objective was to provide insurance for British nationals and businesses operating in Nigeria.
In the 20th century, the British merchants introduced modern commercial insurance into West Africa. In 1921, the Royal Exchange Insurance established the first insurance company with a branch in Lagos. This company dominated the scene for 30 years until 1949 when other companies like General Assurance Society and Tobacco Insurance Company Limited were established.
In 1950, indigenous participation in insurance business was enhanced with the establishment of African Insurance Company. By the time Nigeria got independence, the number had risen to 25 and were mostly owned by Nigerians.
The National Insurance Corporation of Nigeria (NICON) was established in 1969 as a ploy by the Nigerian government to check the operators of insurance business. The Nigeria Reinsurance Corporation was also established in 1977.
In the 1980s, the number of insurance companies had increased to over 100 as some reinsurance companies were established, e.g. Universal Reinsurance Company. In addition, over 150 insurance brokers were also registered.
At present, the leading insurance company in the country is NICON, which is owned by the federal government, and it underwrites at least 35% of the total insurance in Nigeria.
Over the years, different acts have been promulgated to control and regulate the insurance industry, e.g. Insurance Companies Act 1961, Marine Insurance Act 1961 and Insurance Decree 1976. Today, the current legislation is the Insurance Decree 1991.
Since then, the Nigerian insurance industry has grown rapidly, with a wide range of insurers offering a variety of insurance products.
TYPES OF INSURANCE
Today, there are two main types of insurance in Nigeria: general and life.
General insurance includes property, casualty, automobile, marine, and fire insurance. It is designed to protect individuals and businesses from losses resulting from accidents or other unforeseen events.
Life insurance, on the other hand, is designed to provide financial protection for beneficiaries in the event of the death of the policyholder. It is perhaps the most important type of insurance, as it can help families maintain their standard of living in the event of a tragedy.
WHY DO WE STUDY INSURANCE?
Insurance is an important part of our economy and society. It plays a crucial role in helping individuals and businesses protect themselves from losses. By understanding insurance, we can make better decisions about when and how to use it to our advantage.
Some forms of insurance schemes existed in Nigeria before the coming of western civilization. The predominant system during this period was the organized social scheme which included the extended family system, association of age grade and other unions.
The rationale behind this system was to ensure periodic contribution from members and to rally round any member that suffer a loss such as death, illness etc. This form of social insurance is still in existence in Nigeria among community groups.
Presently, the share capital for the setting up of an insurance company has been increased and new measures aimed at controlling the activities of the industry have also been introduced.
INSURANCE COMPANIES IN NIGERIA
Some insurance companies in Nigeria are:
l. Reinsurance Corporation of Nigeria
2. Industrial General Insurance (IGI)
3. Lion of Africa Insurance
4. Amicable Insurance
6. Leadway Assurance
7. Lasaco Assurance
8. Law Union & Rock Insurance
9. Nigeria Fire Insurance
10. Guaranty Trust Life Assurance
11. Sovereign Trust Insurance
12. Standard Alliance Life Assurance etc.