• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

GetInsurance

  • General Insurance
  • Car Insurance
  • Health Insurance
  • Life Insurance
  • Travel Insurance
  • Reviews
  • Others
    • Business Insurance
    • Agents & Brokers
    • Home & Properties
  • Apply for Insurance
You are here: Home / Others / An overview of the Insurance business in Nigeria

An overview of the Insurance business in Nigeria

February 17, 2021 by Get Insurance Today

Insurance is simply a business of risk management and transfer. Therefore, it has thrived for centuries in the business world due to its naturally risky nature. Today, insurance basically covers all spheres ranging from the business to personal life. Insurance is also one of the industries that thrive in a country like Nigeria, with records showing that as of 2018, the sector had a gross written premium running into billions of naira. This article is simply an overview of the insurance business in Nigeria.  

insurance-business-in-nigeria

What is the history of insurance in Nigeria?

The insurance industry in Nigeria has been in existence since 1958 when the first company was established. The African Insurance company Limited come into life after Nigeria gained independence from the British. In 1961, the government formed the Nigerian Department of insurance as a part of the federal ministry of trade. Also, this new development included the insurance companies act of 1961 that compulsorily grouped insurance businesses according to different classes for registration. Therefore, this led to the creation of the office of the Registrar of Insurance.

In addition, the registrar office performs different tasks including monitoring, regulations for registration, and control of insurance operations. Generally, their purpose is to manage overall insurance business practices in the country.

How does insurance work in Nigeria?

Insurance businesses in Nigeria and around the world, operate in the financial sector. In essence, its major function is to guarantee the replacement or financial compensation of assets in case of damage in exchange for a premium. Therefore, in a nutshell, you purchase coverage on your asset, make occasional payments called premiums, and the insurance company bears the risk of that your asset.

For example, if you insure your car at a value of N2million, they would require that you pay a premium in at scheduled dates, in the range of N150k to the insurance company. Furthermore, if your car is stolen or damaged, the insurance company would be mandated to pay a maximum of N2 million as compensation. Also, the specific value of your premium could differ depending on your agreement.

However, on the flip side, if your premium duration expires, and you did not have any claims, the insurance company would not return any part of your premium to you. Therefore, the potential that no damages would occur to an asset, and them securing the resulting premiums, is how they make money.

 

Who regulates insurance in Nigeria?

The current body in charge of regulating insurance business in Nigeria is the National Insurance Commission (NAICOM). Its basic task is to ensure the effective supervision, administration, regulation and control of all insurance businesses in the country. Therefore, it has a duty to protect insurance policyholders, subsequent beneficiaries, and other third parties.

How do I start an insurance company in Nigeria?

Starting an insurance company in Nigeria requires that you meet certain criteria as well as follows some steps. The procedures required are:

  1. Register your business with the government
  2. Get registered with insurance regulatory agencies (NAICOM)
  3. Register with a re-insurance company to protect your company in cases when a claim is too large
  4. Acquire the required necessary permits and licenses depending on the state you want to operate in
  5. Plan out the insurance risks your company would cover. Only start with the low-risk profitable ones
  6. Gather enough money in your reserve (necessary for insurance business registration in Nigeria)
  7. Finally, decide whether you want to stand alone or become a franchise of an established insurance company

Conclusion

The insurance business in Nigeria is profitable as long as you have the right set of workers. In essence, each department in the company works to make things successful, and never underestimate the place of a risk analyst. Now, you have a general overview of the insurance business in Nigeria.  

Related Posts:

  • An Overview of Insurance in Nigeria
  • An Overview of The National Insurance Commission [NAICOM]
  • Overview of the Nigerian Insurance Industry
  • Business Insurance - How to get business insurance in…
  • Business interruption insurance in Nigeria
  • Small Business Insurance explained

Filed Under: Others

Primary Sidebar

Why You Need Insurance and What It Can Do For You

Whether you're a recent college graduate, a … Read More about Why You Need Insurance and What It Can Do For You

Insurance Loans: Everything You Need To Know

One of the many benefits of an insurance policy is … Read More about Insurance Loans: Everything You Need To Know

Nigerian Social Insurance Trust Fund

The Nigerian Social Insurance Trust Fund (NSITF) … Read More about Nigerian Social Insurance Trust Fund

sme-insurance

SME Insurance: Everything You Need To Know

The Insurance industry is a massive industry … Read More about SME Insurance: Everything You Need To Know

Archives

Follow Us Online

  • Facebook
  • Instagram
  • LinkedIn
  • Twitter

Related Posts:

  • An Overview of Insurance in Nigeria
  • An Overview of The National Insurance Commission [NAICOM]
  • Overview of the Nigerian Insurance Industry
  • Business Insurance - How to get business insurance in…
  • Business interruption insurance in Nigeria
  • Small Business Insurance explained

Footer

  • About GetInsurance
  • Contact Us
  • Privacy Policy
  • Terms & Conditions

Copyright © 2023 Get Insurance. All Rights Reserved.