How many Insurance are in Nigeria? This is a question that Nigerians deserve answers to. Insurance is paramount in protecting both people and businesses against risks. The situation concerning insurance in Nigeria has changed positively over the years. Therefore, this article seeks to describe the existing situation regarding insurance in Nigeria, including the types of insurance practiced, mandatory insurance, and major actors in the sector.
How many insurance are in Nigeria?
As captured by the National Insurance Commission (NAICON), the figure of licenced insurance companies in Nigeria from 54 to 67. Thus it reveals a more active insurance market where various categories of insurers exist.
Life Insurance- 13
General business companies – 27
Composite – 12
Reinsurance – 3
Takaful – 4 (permissible Islamic Insurance)
Micro insurance- 8
These diversities brings about a myriad of insurance products appealing to different insurable interests.
The Compulsory elements of insurance in Nigeria
The Nigerian Insurance Act of 2003 provides for compulsory insurance which is for individuals and businesses in their daily operations. These insurance policies include;
1. Group Life Assurance
There is a mandatory requirement for employers to furnish their employees with life cover. This provides reassurance for the families in the advent of understanding insurance in the context of Nigeria
Insurance is a key financial instrument that is used to guard against risks that are uncertain. In Nigeria, the development of the insurance sector has made great strides, bringing with it new products. This article attempts to give consistent facts about the state of insurance in Nigeria, such as how many companies with particular types of insurance services exist in the country, compulsory insurance in offered, and key players in the market.
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How many insurance companies are present in Nigeria?
As contained in the last report made available by the National insurance commission (NAICOM) the number of approved underwriting firms in Nigeria has increased from 54 to 67. this would mean, there is likely to be a more competitive market and it may show that people Nigerian are beginning to appreciate the benefits the insurance market has to offer.
Types of Insurance in Nigeria
The Nigerian Insurance market has a number of products that are designed to cater to individuals and organizations. Discussing these types is relevant as it will assist you in decision-making.
1. Life Insurance
Life insurance is perhaps the most important type of insurance. It aims to provide welfare benefits to the dependents of the insured in case of his or her death. There several types of life insurance offered in the market:
Term Life Insurance: This form of insurance provides coverage for the insured for a certain number of years. In the case of the death of the insured within the validity of this policy, the named beneficiaries are paid the death benefit.
Whole Life Insurance: This kind of insurance policy is applicable for the covered person’s entire life with a cash value component that grows over the years.
Endowment Policies: These policies offer a lump sum payout either at the end of a specified period or on the death of the covered person, whichever comes first.
Life insurance is something everyone should invest in, particularly those seeking to secure their family against contingencies.
2. Health Insurance
Health insurance is necessary for all sorts of medical treatment including but not limited to hospital services, surgeries, and outpatient services. They encompass the following:
Individual Health Insurance: This focuses on an individual’s health and coverage only.
Family Floater Plans: These are the types of plans under which the entire family is insured under one sum insured which is usually cheaper than taking individual policies.
Group Health Insurance: This type of health insurance plan is provided by the employer of the employees and it also in some cases covers the dependents of the employees.
The introduction of health insurance will help curtail the high out of pocket expenditure for medical care and promoting timely and appropriate medical services.
3. Auto Insurance
Auto insurance provides coverage to persons who own vehicles against losses arising from their involvement in accidents, theft, and damage to their vehicles. In Nigeria, this type of insurance comes as mandatory as it is advisable. The most common are the following:
Third Party Liability Insurance: This is the basic insurance that all the driver in Nigeria must have. It pays for the loss or injuries to other people or their properties in an accident but excludes any payments for the insured’s own vehicle.
Comprehensive Insurance: This is a more expensive type of insurance that takes care of third party liabilities as well as risks associated with loss or damage to the insured vehicle including theft and acts of God.
Collision Coverage: It is specifically designed to reimburse the policyholder for damage done to their vehicle resulting from a bike or a stationary object.
Therefore, purchasing sufficient motor vehicle insurance covers policies for motor vehicle owners as a way of cushioning unplanned financial losses due to accidents.
4. Insurance for Long Term Disability
Long term disability insurance replaces your income in case of a disabilities rendering you unable to engage in any form of employment. This is very important in ensuring that your standard of living is maintained and other financial obligations are met, during the time off recovering. Usually, it covers a given percentage of one’s monthly salary until such a time that the insured is able to go back to work.
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Compulsory Insurance in Nigeria
With regard to insurance, types that must be purchased by individuals and organizations are defined in the Nigerian Insurance Act of 2003. It is equally important to appreciate such provisions for the sake of proper understanding and avoidance of any problems.
1. Group Life Insurance
Sponsoring employers are expected to insure their employees via the Group Life Insurance scheme. As a result, in the case of death of the employee, there will be a preset sum for the dependents, who will then take time to cope up with the loss and need the money for sustenance.
2. Motor Third Party Insurance
In Nigeria, every motor vehicle owner is required to be in possession of a third-party insurance. This insurance is designed to cater for all the accidents detrimental to the principles injured in an accident with the vehicle that is covered by the insurance.
3. Insurance of Public Buildings
Every public building or this under construction must be insured against all possible risks including fire, theft and natural disasters. This requirement is important in limiting economic losses and improving safety to the general population.
4. Employer’s Liability Insurance
It is employer’s responsibility to take out this insurance as it covers iii legal liabilities related to injuries or occupational illness of employees while at work. This policy helps prevent claims by the employee against the employer and vice versa.
5. Aviation Liability Insurance
Operating in the aviation industry entails the carrying of third party insurance policy which is geared towards covering the liabilities arising out of the aviation business. This is to ensure all victims of any aviation accidents are compensated.
6. Medical Malpractices Indemnity Insurance
Every medical worker, as well as every medical center, hospitals and practitioners insures obligation. This safeguards them from attacks of negligence and other wrongdoings, in that every health practitioner is entitled to legal representation in case of the emergent circumstances.
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Key Stakeholders in the Insurance Sector of Nigeria
The Nigerian insurance market is characterized by the presence of many competing insurance houses that provide different services. Below are some of them:
Aiico Insurance Plc
In Nigeria, AIICO Insurance Plc is one of the oldest and largest fully composite insurance companies. It is the aim of AIICO to always deliver quality insurance services geared towards life, retirement benefits and risk management. Their portfolio offers services to ordinary people, businessmen, and state institutions.
Leadway Assurance Company Limited
Leadway Assurance is known for its extensive insurance policies such as life, health, auto insurance and general assurance. The company is trusted by customers and for provision of services, therefore it is most preferred by the policy holders.
Mutual Benefits Assurance Plc
Mutual Benefits Assurance encompasses a wide range of insurance services with a special focus on the needs of the customers and on continuous development. They assure life, general and micro appetite insurance products for several different categories.
Niger Insurance Plc Niger
For quite a while now, Niger insurance has firmly occupied the geography of the Nigerian insurance market. They provide a variety of insurance products like life, general insurance while focusing on client specific solutions.
Cornerstone Insurance Plc
Recognized for offering unique and creative insurance solutions alongside world-class customer service, Cornerstone Insurance also provides a variety of products that cover life, health, and even property.
Frequently Asked Questions
1. What Is the Function of NAICOM?
The National Insurance Commission is the body that regulates and supervises the entire insurance business in Nigeria. NAICOM enforces compliance with all laws on insurance and protects the interest of policyholders while striving towards the advancement of the insurance industry.
2. How do I know which insurance policy is right for me?
When looking to choose an insurance policy that is most appropriate, what works for you, your finances and the insurance firm’s standing in the market plays an important role. Hence it is important to study the policies, look for variations of premiums, and where necessary engage an insurance broker.
3. In Nigeria, is it possible to deduct insurance premiums from taxable income?
In Nigeria, it may be possible to get some tax relief against certain insurance premiums like life assurance. However, please seek specific advice from a tax advisor.
4. Should I have a Claim, what should I do?
If you want to file a claim, you should invite your insurance company without delay. Begin by assembling the required papers such as details of the policy, materials concerning the claim, and other relevant information and then complete the claims process as envisaged by the insurer.
5. Is it possible to buy insurance in Nigeria over the internet?
Yes, most insurance firms in Nigeria provide the option of buying insurance on the internet. This gives convenience and also allows an easy comparison of the different policies offered.
6. Why do people consider insurance to be a necessity?
Insurance offers a source of comfort and financial relief for unforeseen circumstances. It assists in the mitigation of expenses resulting from incidents, medical situations, and other crises that may arise and threaten one’s financial well-being.
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