A QUICK GLANCE AT THE INSURANCE INDUSTRY AND ITS OPPORTUNITIES.
A vehicle for managing risks and ensuring that in the event that an individual or corporate body suffers a loss, the insurance company pays out claims which would cushion the effect of the loss for the insured individual or ensure that the insured business does not suffer.
The claims payment could be monetary, or in the form of repairs or replacement (usually applicable to insured motor vehicles damaged in auto accidents) depending on the nature of the asset involved.
Insurance companies help to stabilize businesses in no small measure as they ensure continuity in the event of a major loss where such businesses would ordinarily have gone under.
This is the document that evidences the contract between you and your insurance company.
When you pay a fee (premium) for an insurance cover, you will receive a policy from the insurance company detailing what you need to do under the contract and what they (the insurance company) will do if you suffer a loss.
HOW INSURANCE COMPANIES ARE ABLE TO PAY BOTH SMALL AND HUGE CLAIMS
The Insurance industry is based on the concept of ‘pooling’.
This means that a large number of people or companies pay various sums into a pool for specified risks but only a few would suffer a loss during a particular period. The losses of the few are paid from the funds of the lucky.
Insurance companies also have various layers of backup known as reinsurance to support them in meeting their obligations.
THE KEY PLAYERS IN THE INDUSTRY
- THE INSURANCE COMPANIES:
They accept premiums for insurance covers and pay claims whenever losses occur.
They are strictly regulated by the National Insurance Commission
- 2. THE REINSURANCE COMPANIES.
They provide backup to insurance companies who pay them for same to ensure that they are able to pay both small and large claims and still continue in business. They can be described as very large companies that “re – insure” the insurers so that they are able to handle even very large insurance claims which can sometimes run into several billions of Naira.
- THE INSURANCE BROKERS:
They are the professional corporate intermediaries (middlemen) between the insurance companies and you. They guide you on the appropriate policies to buy, their terms and conditions and also ensure that your claims are paid promptly by the insurance company. Their expertise ensures that none of your claims are denied by the insurance company owing to your non compliance with policy conditions.
They also negotiate good premium rates for you by comparing quotes from various insurance companies.
This is about the only service, we are aware of that comes to you free of charge as the insurance companies they do business with pay their fees and not you. They are strictly regulated by the National Insurance Commission and the Nigerian Council of Registered insurance brokers.
Insurance brokers pass through a very strict licensing process, yearly and are required by their regulators to have a professional indemnity policy to protect them against negligence in the discharge of their duties and further protect their clients.
- 4. THE INSURANCE AGENTS:
These are mainly individuals who sell insurance products for particular insurance companies.
- THE LOSS ADJUSTERS:
The loss adjusters are usually engaged by insurance companies to assist them in assessing a loss (claim) to determine the amount of loss and make recommendations to the insurance company for payment.
The Insurance Industry is very dynamic and offers a diverse array of opportunities.
Please check our blog for our next post for information on building an exciting career in insurance, as well as a highlight on current opportunities.