Types of Insurance Available in Nigeria
Have you ever wondered what types of insurance are available in Nigeria?
I’m sure you are aware that insurance can protect you financially when bad things happen, like a car accident, illness, or theft.
Many Nigerians are not aware of the different insurance options that exist for people and businesses.
In this article, we will discuss the most common and popular insurance policies that Nigerians typically purchase.
TYPES OF INSURANCE AVAILABLE IN NIGERIA
Some of the major types of insurance covers available in the Nigerian market include life insurance, health insurance, motor insurance, home contents insurance, travel insurance, marine insurance, aviation insurance, oil and gas insurance, agricultural insurance, and so on.
Let’s examine them below.
LIFE INSURANCE
Life insurance pays out a lump sum to nominated beneficiaries upon the death of the policyholder. It is one of the most common types of insurance in Nigeria and aims to provide financial security to one’s family in case of demise of the insured.
Life covers come in many forms like term life, whole life, endowment plans etc. Term life is the most basic and affordable form that offers protection for a specified tenure.
Premium life insurance plans also offer periodic payouts to the insured for survival till maturity. This acts as a forced savings instrument with insurance protection.
Nigerian insurance companies like Leadway, AXA Mansard, AIICO are leading players in the life category.
HEALTH INSURANCE
Health or medical insurance covers hospitalization and medical costs in case of illnesses or accidents.
Both individual and family floater plans are available from providers like AXA Mansard, Leadway, Prestige, Kohli Health etc.
Health insurance ensures one does not have to bear huge hospital bills in case of medical emergencies, instead the insurance company picks up the tab based on policy limits.
Group health covers are also common as part of employee benefits.
Government health schemes like NHIS also cater to low income groups. But penetration is still quite low in the populace.
MOTOR INSURANCE
Motor insurance is necessary by law for all vehicles plying Nigerian roads. They are available as third party liability covers to protect against damages to third party property or bodily injuries.
Or as comprehensive policies covering even damages to one’s own vehicle along with third party liability.
Collision damage waiver, personal accident cover for passengers etc can also be obtained as optional add-ons.
Reputable insurers like Ensure, Zenith, NEM, Wapic provide motor insurance to vehicle owners in Nigeria.
HOME CONTENT INSURANCE
Home contents insurance protects against damage to one’s home contents like furniture, electronic items, valuables etc due to causes like fire, theft, floods or other natural perils.
Loss of rent and liability to third parties is also covered in some instances. Home buildings can also be covered by availing separate fire and perils policies.
This is a cost effective way to safeguard one’s home assets which may otherwise require huge capital to replace if damaged.
TRAVEL INSURANCE
Travel insurance covers losses incurred during domestic or international trips – like flight delays, lost baggage, trip cancellations, loss of passport etc.
Overseas medical costs are also covered including ambulance transportation and evacuation during medical emergencies.
Leading travel covers in Nigeria are offered by AIICO Insurance, Leadway, AXA Mansard Insurance etc.
Students going abroad as well as frequent flyers are the biggest customers of travel policies.
MARINE INSURANCE
Nigeria being an import based economy sees huge volumes of cargo imports coming in from other countries.
Marine insurance in Nigeria covers damage to cargo during transit by sea, rail or air. These policies protect the interest of cargo owners against losses arising due to accidents, capsizing or sinking of vessels during transit.
Some common covers include marine cargo insurance, hull and machinery insurance and marine P&I insurance.
Top marine underwriters include Leadway, AXA Mansard Insurance, Cornerstone Insurance, Mansard Insurance etc.
AVIATION INSURANCE
Aviation insurance covers losses and liability related to operation of aircrafts.
Some policies offered are Airline Hull and Liability Insurance, Aviation War Risks Insurance, Aircraft Builders Risk Insurance etc. They indemnify owners of airline companies, airports as well as operators like pilots and crew against financial implications arising out of unfortunate incidents.
Overseas reinsurance support is also critical for underwriting aviation risks.
Leadway, Axa Mansard Insurance, Ensure Insurance provide specialist aviation covers to clients.
OIL AND GAS INSURANCE
The oil sector is a mainstay of the Nigerian economy. But exploration and transportation of oil/gas comes with substantial hazards.
Equipment operated in the sector are hugely expensive and prone to accidents like blowouts or collapses. Business interruption caused during such instances can have huge financial implications.
Hence a range of customized policies like Installation/Rig Cover, Aviation Insurance for helicopters/planes operating in oil industry, Standalone Terrorism Cover, Excess Liability Cover etc. Are essential.
Oil majors like Shell, NNPC as well as domestic operators heavily rely on insurance from companies like Leadway, Axa Mansard Insurance and Prorisk to protect their interests.
AGRICULTURAL INSURANCE
Despite Nigeria being an agrarian economy, agriculture insurance is still a niche segment.
Government sponsored schemes seek to cover farmers against crop or livestock losses arising from causes like floods, droughts, diseases or fire incidents.
Large scale commercial farming, fisheries and poultry businesses also avail coverage to safeguard themselves from events like outbreak of infectious diseases.
Leadway, RegencyNEM provide agricultural insurance products in partnership with government agencies. But overall penetration remains quite minimal indicating huge scope for further development.
CONCLUSION
We have covered many common types of insurance that Nigerians can buy. Life, health, motor, home, travel, marine and other insurance plans are increasingly popular.
While these are some of the common covers available, there are certain other policies like engineering insurance, cyber liability insurance, directors and officers liability insurance, pension insurance etc. Also cater to specific requirements in the Nigerian market.
However many people still do not buy insurance because they find it confusing or don’t trust insurance companies. Insurers need to make their plans simpler to understand and pay claims faster. This will help more Nigerians see value in insurance to protect their life’s interests against unfortunate events.
With better understanding and products, the future of insurance in Nigeria can be brighter.
