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How many Insurance are in Nigeria?

How many Insurance are in Nigeria? This article is here to give answers to this question. The insurance industry in Nigeria is of immense importance to the economy as it provides a number of financial guarantees to people, families, and businesses. In this article, we will analyze the insurance market in Nigeria as of 2023, including the number and kind of insurance companies, major players in the industry, timeline, and other relevant information concerning the essential occupation insurance policies available. We shall also provide answers to some of the most popular questions regarding the operation of the Nigerian insurance market and the benefits that such a market provides to its customers.

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How many Insurance are in Nigeria?

Recent data 2023 nigeria has sixty seven (67) registered insurance firms. The affairs of these companies are overseen by the National Insurance Commission (NAICOM), who is the regulator of the industry, which monitors and enforces the standards and operations of companies that offer insurance services. The systems consists of differing types of insurers but whose markets and specializations are different. Here’s an outline

12 Composite Insurance Companies: These types of insurance companies are flexible as they can offer both life and non- life insurance services with one license. In turn, this gives the freedom to the customers who have different insurance requirements.

27 Non-Life Insurance Companies: Commonly referred to as general insures, these centers offer insurance coverage primarily focuses on risks which are non-life related. The non -life insurance entail hazards such as property, liability, automobile and other insurance that helps people and businesses to minimize risks associated with unforeseen circumstances.

13 Life Insurance Companies: These are the insurers who deals only with the life, health, and personal accident policies. Example of such policies are term life, whole life, endowment policies, and annuities which cover a person’s benefits in the event of death, illness or on reaching retirement age.

3 Reinsurance Companies: These reinsurers help in managing the risk of primary insurers by insuring them. Reinsurers have a very important function in the market as they relieve the burden of large risks to be held by one insurer.

8 Microinsurance Companies: Microinsurance offers relatively low-cost insurance products to disadvantaged Nigerians that need fundamental insurance coverage. Such microinsurance is meant to provide basic and cheap cover for people who earn very little or have episodic resourcing.

4 Takaful Insurance Companies: Clients willing to purchase insurance products that conform to the tenets of Islam will turn to takaful insurance. This type of insurance is characterized by commensurate support and delicate concern.

Who are the major players in the Insurance Market in Nigeria?

Given that there are various insurance companies in Nigeria, some of them have earned goodwill and more trust from their clients. Below are some of the top companies:

Leadway Assurance Company Limited: Being among the biggest and most established insurance companies in Nigeria, Leadway provides numerous life and non-life insuring services.

Custodian and Allied Insurance: Custodian is known for being dependable and creative. The company provides insurance solutions to both individuals and companies.

AXA Mansard Insurance: Belonging to the global AXA Group, AXA Mansard is one of the leading providers of all types of insurance in the country.

AIICO Insurance Plc: It was established in 1963, with a well-deserved reputation as one of the oldest and the most reliable insurers dealing in life and non-life insurances.

Cornerstone Insurance Plc: Cornerstone offers a number of insurance related products customised for the nigerian market which are backed up with high level of digitalisation.

These companies are some of the most recognizable names in the industry and in the services they provide and products they offer are catering for different classes of clients.

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Market Activities in the Nigerian Insurance Market

There is a common perception that the insurance market in Nigeria is a reserve in favour of the brokers. The reason for this is that brokers are heavily relied upon especially in the corporate and business entrenchments. They are the representatives who offer assistance to customers in sourcing for appropriate insurance cover from the relevant insurance providers. On the averagely more than 90% of the premium income is earned by brokers in Nigeria. This indicates their significance within the industry.

On the contrary, individual life insurance policies are mainly sold through insurance agents. Insurance agents are usually hired by insurance companies to assist clients in selecting the appropriate life insurance products. They are the close contacts to individual policyholders as they provide such clients with close assistance.

An Overview of Insurance in Nigeria

The history of insurance in Nigeria can be divided into distinct historical processes. The colonial imposition of British administration saw the growth of some British insurance companies in Nigeria. Insurance was at first an alien concept to most Nigerians, but it became embraced with the passage of time largely as the economy advanced and many people saw the importance of being financially insured.

Founded in 1921, Royal Exchange Assurance Company limited is Nigeria’s primary insurer. The entry of Royal Exchange into the Nigerian market was a major turning point as it paved way for further developments. Subsequently, several other local and foreign insurance firms began to sprout and the sector grew in the process.

To ensure effective control and protection of the consumers, the Nigerian government in due course established the National Insurance Commission (NAICOM) which is the current industry regulator. NAICOM also has responsibilities such as – issuing licenses to insurance companies, enforcing adherence to regulations, establishing minimum requirements for the industry, and ensuring that these companies possess strong financial bases to meet their obligations to their clients.

Different Insurance Schemes

There are numerous insurance plans available in the market as insurance is one of the basic tenets of financial planning. It covers one from any unforeseen circumstances. There are many types of insurance that one may finish with but let us discuss four important types that every individual and family must have:

1. Life Insurance

In this kind of insurance, a certain duration is defined after which the insurance cover becomes defunct unless the assured dies within the cover period.

Whole Lifespan insurance: It is a type of insurance in which insurance cover lasts for the whole life of the policyholder as well as allowing some form of investment.

Endowment Policies: Provide a sum assured after a set duration or upon death of the insured within the set duration.

2. Health Insurance

Health insurance is used to pay for medical-related expenses such as consultations, hospitalization, medication and surgery. Such insurance tends to help individuals deal with the cost of seeking health care, in addition to, giving them the required health access. Health insurance that is offered by the employer is very popular but individuals who do not have such coverage can buy a health insurance privately.

3. Long-Term Disability Insurance

Long-term disability insurance is important for all persons whose financial responsibilities depend on them working and earning money. Long-term disability insurance makes up for lost income in case of illness or injury that makes it impossible to work for a long time. Such an insurance cover becomes critical especially to those in dangerous jobs or to those who do not have enough savings to go for a long break from work without earning.

4. Auto Insurance

It is a legal requirement for all vehicle owners in Nigeria to have auto insurance policy. It is the kind of insurance that protects an individual in case of accidents occurring due to the use of a vehicle. The most regular auto insurance policies have:

Liability Coverage: Covers repair costs and medical expenses for other persons in case of accident where the insured is guilty.

Collision Coverage: Covers repairs for the insured’s car that turns out to be damaged after an accident.

Comprehensive Coverage: This type of coverage provides protection for the insured’s motor vehicle against any damage not resulting from a motor vehicle accident i.e. damage to the vehicle caused by fire, theft or even flood. In relation to this, some insurance companies do encourage that many policies be bought from them and this is when discounts, otherwise called ‘multi-policy discounts’ are awarded to clients.

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Frequently Asked Questions 

1. How many insurance companies are operational in Nigeria?

Nigeria has 67 licensed insurance companies as of the year 2023 which constitutes all forms of insurance providers such as composite insurers, life and non life insurers, re-insurance companies, microinsurance firms and takaful providers.

2. What is the importance of NAICOM in the country’s insurance sector?

NAICOM is the National Insurance Commission of Nigeria which is tasked with the duty of insurance industry regulation within the country. The responsibilities of this commission involves issuing licenses to various insurers, supervising their activities, upholding standards of operations within the industry, and even safeguarding the insurance consumers.

3. Who plays a major control of premium income in the insurance market in Nigeria?

Provision of corporate insurance consumes the bulk of the premium income whereby respectively more than 90% of it is controlled by Brokers. On the other hand, in the case of individual life cover insurance policies, such administrators are referred to as insurance agents.

4. Who was the first insurance company that operated in Nigeria please?

The first company, which technically can be labeled as an insurance company in Nigeria, was the Royal Exchange Assurance Company, which opened its doors to the public in the year nineteen twenty-one. The Company ROCK A., T Shehu and J Ojo, O., provides information on the history of the construction of insurance in Nigeria.

5. What kind of insurance is necessary for me to take for self-protection?

Of the four core insurances that every person should have, life, health, long-term disability and vehicle insurance are the most critical. They protect against various risks and provide financial help when needed.

6. What is the distinction between life insurance and non-life insurance?

The principal purpose of life insurance policies is to provide specifically for eventualities of death, sickness or permanent incapacitation and most such policies concentrate mainly on the health and safety of an individual. Non-life insurance or general insurance encompasses every risk that does not include the risk of life i.e. risk against loss or damage to assets, legal liability, accidents, etc.

7. What is meant by micro-insurance and takaful insurance?

Microinsurance: This is an insurance service that is appropriate for the average joe, who typically can’t afford insurance.

Takaful Insurance: Takaful is the Arabic word for insurance; hence Takaful insurance operates under the Islamic way of doing things.

8. Will I be able to receive a discount for purchasing various insurance policies?

Certainly, a number of insurers design a discount for interested clients who wish to purchase several insurance policies for instance a health, auto and a life insurance policy at the same time. There are chances that the cost of the premium will be lower when the policies are done complete covering the risk and will come with other advantages as well.

Conclusively, the insurance market in Nigeria is fluid and expanding with 67 registered corporations offering several insurance services. Knowing the various kinds of insurances together with the roles played by brokers and agents and NAICOM will assist you in choosing suitable insurance plans for yourself. Whether you are looking for life, health or vehicle insurance, knowledge of these types of policies affords the best approach in.

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