With the exception of a few companies, all of the Nigerian insurers closed the 2009 fiscal year with losses. In addition to shrinking profits, the capital of the different players have been seriously affected. The introduction of transparency rules, imposed by the National Insurance Commission (NAICOM) has put an end to a number of practices deemed illegal but widely in use for many years: inadequate quotations, commissions falsifications…
The new provisions require insurers to reduce at least by 25% the outstanding premiums and debts of more than three months, posted on the balance sheet. These will have to be carried forward to loss and profit account once the loss has been estimated. The deferral of losses posted on the financial markets has deepened the deficit to the extent that many companies failed to honor the payment of dividends due to their shareholders.
