What are the Key Players of Insurance Market in Nigeria is elaborately discussed in this article for your perusal.

Challenges facing insurance sector in Nigeria

The main principle of the insurance market is the pooling of risks. In the insurance market, compensation is paid based on the premium and the extent of losses suffered.

Read Also: 7 Principles of Insurance

Despite this condition, 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 in the insurance market is the Insurance Decree 1991.

Presently, the share capital for the setting up of an insurance company has been increased and new measures are aimed at controlling the activities of the industry.

The key players use the insurance market as an aid to trade and offer services and monetary assistance.

The key players in the insurance market can be classified as actuaries, underwriters, insurance agents, and brokers. This article will explain these key players and their classification.

1. Actuary

This is a person involved in life assurance, assessing the risks and calculating the premium, and handling matters connected with pension funds.

Life Assurance in this context is one important branch of insurance that is taken as a protection against loss caused by the death of a person.

This policy covers human beings and not properties. The risk covered here will inevitably occur but the time of occurrence is what is not known.

2. Underwriter

This is a marine insurer that offers to cover, underwrite or assume a portion of a risk. The underwriter would write under the details of the risk, his name, and the proportion he has accepted.

A common example is the Lloyds Underwriters, an association of London underwriters incorporated in 1871 by Edward Lloyds.

They are organized in syndicates that undertake a fraction of the risks brought to them by the agent of the shippers. Lloyds Underwriters is not a corporation, but it provides facilities to members to transact business and it is not responsible for losses incurred by the underwriters.

The underwriters use the process of underwriting whereby a merchant of an insurance company undertakes to cover, underwrite a portion of a risk or assume part of a risk.

The duty of the underwriters as a key player is common in marine insurance because of the enormous cost involved which cannot be borne by one insurance company.

3. Insurance Agents

An insurance agent ” is a person who is employed by the principal to bring him into a contractual relationship with the third party. Insurance agents act on behalf of insurance companies on a part-time or full-time basis.

The purpose of the part-time agent as an insurance agent is to act as an intermediate. He is an agent who brings the insured to the insurer.

The agent, that performs this function usually is a sideline. They are in different professions such as banking, accounting, and so on.

The part-time agent frequently brings them into contact with people seeking insurance. These agents are not employed by the insurance company on a full-time basis rather they are normally given commissions based on the duty they perform.

On the other side, the full-time agent is an intermediate that can be employed. He is employed by the insurer on a full-time basis. He is remunerated partly by the commission and partly by salary. Full-time agents are considered as staff of the company who go about canvassing for the insurers.

4. Insurance Brokers

An insurance broker is a person who negotiates insurance coverage with an insurance company on behalf of a client. They are experts in insurance, hence can offer advice and professional assistance in arranging insurance policies on behalf of their clients, give advice on insurance needs, the best type of cover, best marked, and claim procedures.

As a key player, the insurance broker normally obtains a commission called brokerage from the insurer. He is independent of the insurer.

Conclusion

The key players act as a link to the insurer with the third party, otherwise called the buyer. The Key players give advice and professional assistance to the buyer in arranging insurance policy and they can also handle claims procedures for the client.

Generally, the key players are fully aware of a secure future, hence they will work harder to bring about higher productivity.

What are the Key Players of Insurance Market in Nigeria