Meaning And Historical Development Of Insurance
Overview
Long before anyone wrote a policy, traders crossing the Sahara and sailors leaving Lagos and Liverpool had already worked out the idea behind insurance: if many people who each face the same danger put a little into a common purse, the purse can rebuild the one who is actually struck. Insurance is simply that ancient bargain, tidied up into a legal contract and priced with mathematics.
In this lesson you will learn what insurance really is and how it moves risk off one person and onto a shared pool, how the industry grew from marine trade and Edward Lloyd's coffee house into the modern market, and how it took root in Nigeria before and after independence. You will meet the laws that govern it, right up to the Nigerian Insurance Industry Reform Act of 2025, and you will see why a business this important is controlled by statute rather than left to private bargaining.
Objectives
- Define insurance and explain how it transfers risk from an individual to a pool of contributors
- Trace the historical development of insurance from early merchant practice to the modern industry
- Outline the growth of insurance in Nigeria before and after independence
- Identify the principal Nigerian insurance legislation and state the purpose of each
- Explain why insurance is regulated by statute rather than left to private agreement
Lesson Note
Sign Up to Continue
Create a free account to access all learning resources, practice questions, and track your progress.
Lesson Evaluation
Congratulations on completing the lesson on Meaning And Historical Development Of Insurance. Now that youve explored the key concepts and ideas, its time to put your knowledge to the test. This section offers a variety of practice questions designed to reinforce your understanding and help you gauge your grasp of the material.
You will encounter a mix of question types, including multiple-choice questions, short answer questions, and essay questions. Each question is thoughtfully crafted to assess different aspects of your knowledge and critical thinking skills.
Use this evaluation section as an opportunity to reinforce your understanding of the topic and to identify any areas where you may need additional study. Don't be discouraged by any challenges you encounter; instead, view them as opportunities for growth and improvement.
- Insurance transfers the risk of loss from the insured to the: A. Government B. Insurer and its pool of policyholders C. Broker who arranged the cover D. Bank that holds the premium Answer: B
- Which class of insurance developed earliest? A. Motor insurance B. Life assurance C. Marine insurance D. Fire insurance Answer: C
- In which year did the Royal Exchange Assurance open the first insurance branch in Nigeria, in Lagos? A. 1897 B. 1921 C. 1961 D. 1969 Answer: B
- The body that licenses and supervises insurers in Nigeria is the: A. Central Bank of Nigeria B. Nigerian Reinsurance Corporation C. National Insurance Commission D. Securities and Exchange Commission Answer: C
- Which statute currently governs the insurance industry in Nigeria? A. The Insurance Companies Act 1961 B. The Insurance Act 2003 C. The Nigerian Insurance Industry Reform Act 2025 D. The Marine Insurance Act 1906 Answer: C
Sign Up to Continue
Create a free account to access all learning resources, practice questions, and track your progress.
Sign Up to Continue
Create a free account to access all learning resources, practice questions, and track your progress.
