How to Start an Insurance Company in Nigeria

Setting up an insurance company is a herculean task that requires huge funding and appropriate licensing. To form a general or life insurance agency, the company must have a minimum of N1.5 billion naira of which 50% is paid up share capital.
The business should be incorporated by the Corporate Affairs Commission and registered by appropriate regulatory agencies. The insurance company is mandated to have re-insurance for claims and compensation purposes.
Very large claims are serviced through the aid of reinsurance companies. Other requirements include state permits, license, tax issues and startup funding.
Determine the Insurance Risk to Offer
You need to determine the type of insurance risk to offer clients. There are a huge number of insurance types and product list. They could be vehicle insurance, life insurance, general or home insurance. Here is a list of different types of insurance.
Category of Insurance
There are different types of facilities offered by insurance companies. You have categories in food insurance, health, liability, agriculture and property insurance.
Others are self insurance, deposit insurance, mortgage insurance, and life insurance. Major categories are flood, general, trade, credit and bancassurance. More are multiple-peril insurance, travel, vehicle and home insurance..
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Types of Insurance
  •  food insurance
  • Health
  • Liability
  • Agriculture
  • property insurance
  • self insurance
  • deposit insurance
  • mortgage insurance
  • life insurance
  • flood
  • general
  • trade
  • credit
  • bancassurance
  • multiple-peril insurance
  • travel
  • vehicle
  • home insurance
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Register the Business
The first step to owning an insurance company is to register the business. You need a business name and incorporation.  
Register the business with the corporate affairs commission as a public liability company. The next step is to register the business with the regulatory agencies. The regulatory agency for insurance firms in Nigeria is the Nigerian Insurance Commission (NAICOM)
How to Register with NAICOM
General Insurance Registration Requirements
The applicant must obtain a form from the National Insurance Commission. They need a certificate of incorporation from the CAC.
The applicant needs to provide evidence of payment of N30, 000,000 registration fees to NIC. This sum might have been reviewed after date of this publication.
You need a true copy of memorandum and article of association. Other requirements are certified true copy of form CO2, CO6 and CO7.
The CO2 is the share allotment form, CO6 situation of registration office and CO7 the particulars of directors in your company. You need to present a statutory insurance company business plan and feasibility study.
The plan should highlight estimated transactions in the next 5 years. You need a certificate of statutory deposit of N1.5 billion naira of which 50% is paid up share capital.
The applicant needs to provide a statement on method of profit distribution between shareholders and policy holders. More requirements are evidence of valid reinsurance treaty, retrocession arrangement.
You then submit a specimen letter of proposal form, policies, terms and conditions. You need to fashion a table of premium rates and why.
Other documentation is copy of appointment letter of proposed chief executive. Then add a declaration by the chief executive on location of principle office of the registered company.
More things to submit is an affidavit by each director, manager, CEO and secretary to their qualification/non qualification. The company then submits qualifications, names, and addresses of each executive director of proposed departments.
You need to show evidence of their experience, expertise in insurance matters.  The chief executive must acknowledge through a declaration notice to serve and consent.
The company also submits the curriculum vitae and credentials of directors and chief executive. Show evidence of disengagement of proposed chief executive from previous employment.
Finally a declaration by chief executive and two directors through the signing of the application form.
Requirements for Registration
  • Must  obtain a form from the National Insurance Commission
  • a certificate of incorporation from the CAC
  • Evidence of payment of N30, 000,000 registration fee to NIC
  • a true copy of memorandum and article of association
  • a certified true copy of  form CO2, CO6 and CO7.The CO2
  • present a statutory insurance company business plan and feasibility study
  • a certificate of statutory deposit of N1.5 billion naira of which 50% is paid up share capital
  • provide a statement on method of profit distribution between shareholders and policy holders
  • evidence of valid reinsurance treaty
  • submit a specimen letter of proposal form, policies, terms and conditions
  • a table of premium rates
  • a copy of appointment letter of proposed chief executive
  • a declaration by the chief executive on location f principle office of the registered company
  • an affidavit by each director, manager, CEO and secretary to their qualification/non qualification
  • submits qualifications, names , addresses of each  executive directors of proposed departments
  • show evidence of their experience, expertise in insurance matters
  • chief executive must acknowledge through a declaration notice to serve and consent
  • submit the curriculum vitae and credentials of directors and chief executive
  • show evidence of disengagement of proposed chief executive from previous employment
  • a declaration by chief executive and two directors through the signing of the application form
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Head Office
You need to setup a head office for the company. The location should be in a financial district. The staff should be highly qualified and motivated. Marketing considerations are electronic, print and online resources.

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