Mortality Rate Analysis and Life Insurance Pricing in Selected Nigerian Insurance Companies

This study examines the relationship between mortality rate trends and life insurance premium pricing in selected Nigerian insurance companies. Life insurance pricing depends fundamentally on accurate mortality assumptions, yet many Nigerian insurers rely on outdated or imported mortality tables that may not reflect the local population's demographic reality. This misalignment can lead to either over-pricing, which reduces market penetration, or under-pricing, which threatens insurer solvency. This study adopts a descriptive research design and collects secondary data from the published financial statements and product pricing schedules of eight life insurance companies licensed by the National Insurance Commission for the period 2019 to 2023. Mortality data are sourced from the National Population Commission and the National Bureau of Statistics. The study evaluates the degree of alignment between pricing assumptions and actual mortality experience, using standard actuarial comparison methods. Findings reveal that most sampled insurers apply mortality rates derived from outdated industry experience studies, with limited adjustments for regional or socioeconomic mortality differentials. Insurers operating in the South South and North East zones demonstrate the widest gaps between assumed and actual mortality rates. The study concludes that the absence of a contemporary Nigerian mortality table is a significant structural weakness in the life insurance market. It recommends that NAICOM commission a national mortality and morbidity experience study to produce an updated industry reference table, and mandate its adoption in all new product pricing submissions.

Keywords: mortality rates, life insurance, premium pricing, NAICOM, Nigerian insurance.