INSURANCE AS A TOOL OF ECONOMIC DEVELOPMENT IN NIGERIA
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INSURANCE AS A TOOL OF ECONOMIC DEVELOPMENT IN NIGERIA
Chapter One
INTRODUCTION
1.1 History and Development of Insurance in Nigeria.
Insurance as a company did not exist in Nigeria until the late 20th century. Before then, Nigeria had some organised mutual social insurance plans, the most important of which was the extended family system.
Age grade associations and cultural unions. These associations and unions preserved funds gathered from members and distributed to other members in times of need. The first functioning branch of an insurance company in Nigeria was opened in 1921 by the Royal Exchange Assurance Company Limited.
In 1949, three British-owned insurance companies were established and operated mostly in the international and expert sectors, as well as the motor insurance market. As of then, Nigeria had 300 cars and 17 miles of asphalt road.
By 1960, Nigeria had 88 insurance companies, with a gross premium income of million and a market income of N634 million. Some of the largest insurance companies operating in Nigeria are:
NICON: National Insurance Corporation of Nigeria, created 1969
The Anchor Insurance is licenced since October 1989.
Insurance associations have also emerged to promote the expansion of the insurance company or business and to safeguard the interests of members, which include:
NICON (National Insurance Association of Nigeria)
NIA – Nigerian Insurance Association
WAICA: West Africa Insurance Companies Association
AIO – African Insurance Organisation
For many years following the beginning of the 17th century, insurance was not a specialised business, but rather one carried on by merchants who occasionally underwrote policies in addition to their regular activity.
In Akwa Ibom State during the early days of insurance, policies were held on the lands of brokers who worked as merchants’ intermediaries in purchasing and selling products.
By the turn of the twentieth century, the insurance industry had become highly specialised. As a specialised firm, two flaws needed to be addressed.
First, there was no guarantee of the underwriters’ financial stability, and second, there was no fixed location for conducting business. As a result, the insurance agents were forced to travel from office to office in order to get adequate coverage.
1.2 Statement of Problems
Insurance companies play an important role in providing value that exceeds people’s requirements and aspirations while also remaining cheap.
Some of the issues confronting the sector (Insurance) are related to the business environment, competition in the insurance industry, the use of technology, and regulation.
The consequences and issues of insurance businesses in Nigeria, with a special focus on Anchor Insurance Company Limited, Uyo, have been described as a long outstanding preamble by insurance practitioners.
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