Some forms of insurance schemes existed in Nigeria before the coming of western civilisation. The predominant system during this period was the organised social scheme which included the extended family system, assoCIation of age grade and other unions.
The rationale behind this system was to ensure periodic contribution from members and to rally round any member that suffer a loss such as death, illness etc. This form of social insurance is still in existence in Nigeria among community groups.
In the 20th century, the British merchants introduced modern commercial insurance into West Africa. In 1921, the Royal Exchange Insurance established the first insurance company with a branch in Lagos. This company dominated the scene for 30 years until 1949 when other companies like General Assurance Society and Tobacco Insurance Company Limited were established.
In 1950, indigenous participation in insurance business was enhanced with the establishment of African Insurance Company. By the time Nigeria got independence, the number had risen to 25 and were mostly owned by Nigerians.
The National Insurance Corporation of Nigeria (NICON) was established in 1969 as a ploy by the Nigerian government to check the operators of insurance business. The Nigeria Reinsurance Corporation was also established in 1977.
In the 1980s, the number of insurance companies had increased to over 100 as some reinsurance companies were established, e.g. Universal Reinsurance Company. In addition, over 150 insurance brokers were also registered.
At present, the leading insurance company in the country is NICON, which is owned by the federal government, and it underwrites at least 35% of the total insurance in Nigeria.
Over the years, different acts have been promulgated to control and regulate the insurance industry, e.g. Insurance Companies Act 1961, Marine Insurance Act 1961 and Insurance Decree 1976. Today, the current legislation is the Insurance Decree 1991.
Presently, the share capital for the setting up of an insurance company has been increased and new measures aimed at controlling the activities of the industry have also been introduced. Some insurance companies in Nigeria are:
l. Reinsurance Corporation of Nigeria
2. Industrial General Insurance (IGI)
3. Lion of Africa Insurance
4. Amicable Insurance