The business of insuring property has a long history, especially in Europe where the practice has developed for centuries. In Nigeria, it’s been around for about a century. But Nigerians have only been directly involved with running it for half that time.
The first insurer in Nigeria was established in 1918 by colonial British trading interests. It was a branch of the Royal Exchange Assurance Agency which was first represented on Nigerian soil by Barclays Bank, before becoming a full branch of its London-based parent company in 1921.
In the early days, the insurers served an almost exclusively European customer base, composed largely of British merchants doing business in African colonies. For decades, they helped ensure the transactions and property of these businesses, and ensure that they were protected against the risks of their trade.
The local population was all but left out of these developments, especially in the first few years and decades. But as an indigenous merchant and professional class emerged, the financial institutions began to do business with them as well.
These early insurers grew rather slowly. They were hampered by the First and Second World Wars and struggled in the 1920s and 1940s, the decades following those conflicts. But the sector survived, partly because commerce continued to thrive. With more cities becoming industrialized and new business establishments opened, insurance houses attracted more clients, whose payments ensured that they remained functional.
The First Indigenous Insurers
Nigerians didn’t venture into insurance until the 1950s. In 1958, the first indigenously owned insurance company, the African Insurance Company was established. It was promoted by Kingsley Ozumba Mbadiwe, an independence-era politician and statesman. There was assistance from A.G. Leventis, who brought in the UK’s Employers liability Assurance Corporation as technical partners.
In the 1960s, other local insurers appeared. One, the African Alliance Insurance Company, was promoted by S.L Edu. Another, Law Union and Rock Insurance, was backed by Mobolaji Bank-Anthony. By 1965, there were more than 20 insurance companies with capital exceeding ₤10,000 doing business in the country (this was worth much more at the time than it does today).
By 1976, when the Nigerian Insurance Act was signed, there were more indigenous insurance companies than foreign ones. The drive towards indigenization, which intensified in the mid-1970s, transferred most of the power in the sector to locales.
The Insurance Industry Today
After a difficult period coinciding with the economic slump of the late 1980s and 1990s, the insurance sector in Nigeria has emerged stronger. Between 2003 and 2007, it grew at an average rate of 18% per year. New players came in, and capital bases were consolidated.
It’s not clear what the future will look like for Nigeria’s insurance sector. But it’s hoped that it will be robust enough to take on the risks incurred by Nigerians and their businesses.
Featured image source: NG Careers