The Role of Actuarial Science in Insurance Product Pricing in Nigeria

This study investigates the role of actuarial science in insurance product pricing decisions in Nigerian insurance companies. Actuarial analysis, encompassing mortality tables, loss frequency distributions, risk classification, and rate adequacy testing, is fundamental to sound premium pricing and policyholder protection. In Nigeria, limited actuarial manpower relative to the market size raises questions about the quality of pricing practices and the adequacy of technical reserves. This research employs a professional practice evaluation design using data from 25 practicing actuaries, 30 senior underwriters, and 15 company chief financial officers at insurance firms across Lagos and Abuja. Semi-structured interviews explore premium calculation methodologies, data quality challenges, reliance on international actuarial tables versus Nigerian-specific mortality and morbidity experience data, and regulatory requirements for actuarial certification of insurance products. Qualitative findings are supplemented by a review of pricing documentation from five selected product types. Thematic analysis characterizes the role of actuarial expertise in pricing workflows and identifies gaps. Preliminary findings are expected to reveal that many insurance companies rely on reinsurer-provided pricing models rather than internally developed actuarial rate analyses, limiting their pricing autonomy. The study recommends expanding the supply of locally trained actuaries and requiring NAICOM-approved actuarial sign-off on new product pricing submissions. Keywords: Actuarial Science, Insurance Pricing, Premium Calculation, Nigeria, Actuarial Manpower.