Insurance (Definition, History)

Definition of Insurance:

Insurance is defined as a contract between an insurerAn insurer is usually a company but can be a person, that provides financial support in the case of specific bad events listed in an insurance policy. e.g NICON insurance company,... More and an insuredThe insured is the party (ies) (person or firm) having property covered against risk. They are covered by an insurance policy. More. The insurer promises to compensate the insured against loss that may be suffered in the future which is insured against.

This contract is usually completed when the policy form which contains the terms of the contract is completed and signed by the insured and then accepted by the insurer. An insurance policy is a document setting out the exact terms of an insurance contract, the risk insured and the period covered. It is a contract of utmost good faithThe principle of utmost good faith, also known as "uberrimae fidei" or "uberrima fides", states that the insurer and insured both must be transparent and disclose all the essential information required... More (also known by its Latin name, uberrimae fidei)

History of Insurance:

The earliest form of insurance started in Rome among the Italian merchants. Marine insurance was recorded as the foremost which was practised then by the merchants who traded by sea. They would agree that the owners of goods in the ship, that got damaged via the voyage, should be principle of sharing the losses of the few by the contributions made by many others.

It was these Italian merchants (14^th-15^th centuries AD) who introduced it into Britain and other western European countries. The practice of insurance had developed in Britain as of the year 1601 to the extent that the British parliament passed an Act to regulate the conduct of the business.

It was believed that insurance was introduced in Nigeria by the British merchants who used to bring their finished goods in exchange for cocoa, palm oil, and other palm produce, groundnut cotton, timber, etc.

In 1991, the Africa and east trade company introduced the Royal exchange- assurance agency as the first insurance agency in Nigeria. This assurance became a complete monopoly of being the only insurance company for 28 years before the other three companies were established in 1949. The first African insurance company was established in 1949. The first African insurance company was established as the first indigenousAn indigene is a person, animal, or plant that is native or original to a particular area or region; basically, it refers to someone or something that originates or is naturally... More company. As of 1960, there were 25 insurance companies in Nigeria out of which only four were indigenous ones.

The federal government established the first insurance company in 1969 which was named the National Insurance Corporation of Nigeria to act as an insurer, reinsurer, and broker. The reinsurance business was withdrawn from NICON, in 1977, when the Nigeria Reinsurance Corporation was established.