📖 ABSTRACT/OVERVIEW
This study applies actuarial mathematics to the computation and analysis of life insurance premiums for products offered by selected insurance companies licensed by the National Insurance Commission and operating in Lagos, South West Nigeria, Africa's largest insurance market by total premium volume. The actuarial pricing of life insurance products requires the integration of probability theory, interest rate mathematics, and mortality table analysis to determine the single premium and level annual premium that equate the expected present value of future benefits with the expected present value of future premiums. The study reviews the construction of the 2004 Nigerian life tables and compares them with the 2012 update issued by the National Insurance Commission, examining how revisions to mortality assumptions affect premium computations across age cohorts and policy types. Net single premiums, net level annual premiums, and gross premiums incorporating expense loadings are computed for whole life, term life, and endowment products, using both the prospective and retrospective reserve methods. Sensitivity analyses assess the impact of alternative discount rate assumptions on computed premium levels, contextualised within the current Nigerian monetary policy rate environment. Results indicate that premium differentials between the 2004 and 2012 mortality tables are economically significant for older age cohorts and long-duration endowment policies. The study recommends a comprehensive update of Nigeria-specific mortality tables using recent vital statistics data. Keywords: actuarial mathematics, life insurance, premium computation, mortality tables, Nigeria
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