Back to: Insurance
Hello my brilliant learner! It’s always a joy to have you back in class. You’ve been building a strong foundation in insurance, and today, we’ll take things a little further. We’re stepping into the insurance market—a very real and practical part of the industry. You’re going to understand who the key players are and how insurance operates behind the scenes.
Insurance Market
Have you ever wondered where insurance policies come from? Or who you’re really dealing with when you pay for insurance? Well, that’s what the insurance market is all about. It’s the system that connects the people who need protection (like you and me) with those who provide it (insurance companies and agents). Knowing how the market works helps you make smarter choices.
Overview of Insurance Market
The insurance market is simply the environment where insurance products are bought and sold. It includes all the people, organisations, and systems involved in creating, selling, and managing insurance policies.
Just like how you have different sellers in a market—traders, wholesalers, distributors—the insurance market also has different players.
Types of Insurance Providers
Insurance Companies (Insurers): These are the main players. They sell policies and pay claims. In Nigeria, examples include Leadway Assurance, AIICO, and AXA Mansard.
Reinsurance Companies: These are companies that provide insurance to insurance companies. They help insurers spread big risks so they don’t run out of money after massive losses.
Mutual Insurance Companies: These are owned by policyholders. Instead of making profits for shareholders, any profits are shared with members.
Government-owned Insurers: These are run by the government to provide insurance in areas that private companies avoid—like crop or flood insurance.
Insurance Intermediaries
These are the people or organisations that act as middlemen between you and the insurance company.
Insurance Brokers: They represent the buyer (you). Their job is to find the best policy at the best price for you. They work independently and offer expert advice.
Insurance Agents: These ones work for the insurance company. Their job is to sell you the company’s products and guide you through the process.
Underwriters: These are the experts who study risk and decide how much premium to charge for each policy.
Loss Adjusters: When you make a claim, they assess the damage and help the insurer decide how much to pay.
Examples
Let’s imagine Musa wants to insure his poultry farm. He meets an insurance broker who helps him compare different policies. After choosing one, an insurance agent helps him fill out the forms and finalise the purchase. Later, when there’s a disease outbreak and birds die, a loss adjuster comes to assess the loss and the insurer pays Musa based on their report.
Or think about Zainab, who works at an insurance company. She’s an underwriter, so her job is to calculate the right premium based on how risky the customer is.
Summary
The insurance market is a system made up of insurers, reinsurers, brokers, agents, underwriters, and more. Each one plays a special role to make sure policies are created, sold, and managed properly. Understanding this system helps you make smart, confident choices when buying insurance.
Evaluation
Who are the main participants in the insurance market?
What is the role of an insurance broker?
What does a loss adjuster do during the claims process?
You’ve just learned what many people never understand—even those who have insurance! Knowing how the market works puts you in control. Keep this up, and you’ll become a confident, knowledgeable force in the world of insurance. On to the next!