Insurance In Nigeria Is Very Much The Same As In Any Part Of The World: For most people, buying or building a house is probably the biggest and most expensive investment they would ever make and it is vital that their investment is fully protected. All over the world, many secure their property with the aid of property insurance.
In Nigeria is very much the same as in any part of the world. It is basically for the same reason that people have insurances – life being unpredictable. While everything may be smooth at a moment, you never can tell what happens the next minute. Hence, the need to be protected when the unexpected happens.
It is evident that insurance in Nigeria has over the years evolved. This means the industry today is definitely not what it is as at when it started. There are no doubt improved laws, increased number of insurance companies in Nigeria among other things.
Below are some of the available types in Nigeria:
- Property .
This is arguably one of the most popular type in Nigeria. This is definitely different from all other forms of insurance. Here, what is being insured is life itself.
It is also arguably one of the most important. Though we cannot predict the time of a person’s death, we can, however, make insurance. What it does is to provide protection against premature death or ensure an adequate amount of money at old age.
It is, however, more than just protection, it is also a form of investment. This is due to the fact that a particular amount is returnable at death or the expiry of a period.
This is one of the most common types in Nigeria. This type allows the insured to make claims to reimbursement as long as they are covered. People often make use it to protect their property/properties from unexpected losses. Which may be as a result of fire outbreak, flood or other occurrences.
It is, however, important that before a claim can be made, it must be as a result of the specified risk. Most landlord and real estate investors make use of this in order to safeguard their property.
This is a type that provides protection against loss of marine perils. In this case, marine perils include cases or situations like a collision with rocks or other ships, attacks from enemies, fire etc. All these are forms of damages opened to marines.
So, the overall idea of this type is to insure the ship, cargo and freight. Unlike before where the number of risks handled is small, there is a wide range of marine insurance today. In fact, it has further been divided into Ocean Marine and Inland Marine.
This is also an important type of insurance in Nigeria. This types covers all the risks that are results of fire. It is important as every other because they are things we do not have control over.
While you may be careful enough with fire in your house, you really cannot speak for your neighbour. The truth is, you can never be too careful in cases like this. Once your property is covered by fire insurance, you can always make claims when losses are results of fire.
Insurance Companies In Nigeria
There are a good number of insurance companies in Nigeria. Although the industry faces lots of challenges, there are also lots of positives in the industry. The number of insurance companies in Nigeria is on the rise because of the lucrative future of the industry.
We have compiled a list of them in Nigeria.
- African Alliance
- Capital Express Assurance
- Continental Reinsurance Plc
- Custodian and Allied
- Law Union & Rock
- Sovereign Trust
- UBA Metropolitan Life Insurance
Challenges Facing Insurance in Nigeria
As mentioned earlier, there are also a number of challenges in the insurance industry in Nigeria. Most of which is due to people’s perception of the industry, lack of skilled personnel, weak regulatory framework among other things.
Lack Of Skilled Personnel
It is one thing that has become a major problem faced by all the industries in Nigeria. This is because there are more people in industries in which they know little or nothing about.
There is a shortage in the number of skilled professionals in the industry; brokers, underwriters, actuaries etc. Though there is the argument that people learn on the job, it is often not reliable. The reason is that most of this companies do not train their staffs adequately.
Hence, they have little or no experience of the field they find themselves. Inasmuch as this is the case, more effort should be put in place to train employees who do not have the technical background of the field.
Weak Regulatory Framework
The framework of this companies is weak. The policy guiding the industry is no doubt due for reviews but they are yet to be looked into. It is important to note that most of these policies in places today are old and are a result of the dominance of foreign insurance companies.
That is, most of the insurance policies were either to combat the foreign dominance on the insurance industry or direct copy of foreign policies.
Though the National Insurance Commission ensures the effective administration, regulation and control of the insurance in Nigeria. There are still a number of things that need to be looked into: it’s inability to set standard premium rates for certain insurance products.
Inadequate Access to Information Technology
The world continues to shrink from a global village to a global street, thanks to the introduction of newer technologies. It is, however, a drawback as some of the companies in Nigeria have not embraced the benefits of the technology.
In cases like document management, things are still done manually in most of the companies in Nigeria. Which puts the industry behind when compared with other industries in the country. Often times, the slow process of things lead to delay in settlement of claims, fraudulent practices and sometimes errors in the whole process of business.
However, this does not mean that all insurance companies in Nigeria still go about the business like in the 90s. It is, however, a wake-up call for more companies to embrace technology, for the benefit of insurance in Nigeria.
Perception In Nigeria
Another major challenge faced by companies in Nigeria is the perception people have about the industry. Over the years, it is usually hard convincing the average Nigerian to sign up for insurance policies. Which is largely due to their perception of the industry.
Most people are sceptical about how insurance in Nigeria works. They do not trust the system. Some of the reasons are because of the slow process of settling claims or denying claims totally. Hence, people tend to not want anything to do with insurance companies in Nigeria. Pirotti-Projects Creative, Dynamic & Seasoned Professionals
However, this companies in Nigeria need to do more to enlighten the public in order to right the perception of people towards the industry. They should properly educate prospective clients; especially during the process of signing insurance policies. So as to know what they are signing for entails.