We have all come across insurance companies, most times we hear people talk about it.
Various countries operate and have different insurance companies, Nigeria as a country is not left out from this development. This article will guide you down on the history of insurance in Nigeria.
Insurance is a practice, arrangement, thing providing protection, compensation for loss, illness, death, damage and against a possible eventuality in retain for payment of a premium. We have various kinds of insurance; health, goods, life, property, enterprises etc.
Insurance begin to function before Nigeria even gained independence. The development of insurance in Nigeria was poor, compared to other countries at that time; one of the reasons was the economic sector of the country.
The birth of modern insurance in Nigeria is closely associated with the arrival of British trading companies. The foreign companies needed to deal with some of the risks at a local level; these companies were given licenses by their foreign authorities, these licenses that were issued to them, allowed the firm to operate and facilitates claims, supervision and issue covers.
The first insurance company was the Royal Exchange Assurance Agency. It was inaugurated by the Africa and East trade companies in the year 1918. Due to the Second World War, commerce and trade suffered in Nigeria and in the United Kingdom, which results to the slow growth, progress between the 1920s and 1940s. After the war, the insurance company picked up and there was progress again.
The first insurance company established in Nigeria was the Africa Insurance Company Limited in the year 1958. After Nigeria gained independence in the year 1960, they were up to twenty-five (25) insurance companies, four (4) were owned by Nigerians only.
In 1961, the J.C obande commission report resulted in the establishment of a Nigerian department of insurance in the Federal Ministry of Trade, which was later transferred to the Ministry of Finance; The Act of 1961 of the insurance companies made it necessary for insurance business to be grouped into various classes for registration.
The purpose for this is to manage insurance practice. We have the minimum capital requirement and other regulations for registration, monitoring and control of insurance operations.
The insurance decree of 1976 was put together to make provision of the various laws. Mode of operation, Amalgamation & transfer condition for authorization of insurer.
In 1989, insurance special supervisory fund was put up, which made it compulsory for insurance companies to give 1% of their gross earnings to the fund. National Insurance Commission was established in 1997 with the aim of regulating and supervising insurance in Nigeria.
Some of the functions of the National Insurance Commission (NAICOM);
1. Establish standards for the conduct of insurance business in Nigeria
2. Act as an adviser to the Federal Government on all insurance related matters.
3. Protect insurance policy holders and beneficiaries and third parties to insurance contracts.
4. Contribute to the educational programmes of the charted Insurance Institute of Nigeria and the West African Insurance Institute.
5. Regulate transactions between insurers and reinsurers in Nigeria and those outside Nigeria.
In the year 2003, the insurance Act was set up and signed into law. Since then, the insurance industry has been growing in Nigeria.
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