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By NBF News
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In 2009, Sanusi Lamido Sanusi was appointed governor of the Central Bank of Nigeria and he immediately went to work with more reforms in the financial services sector. It should be noted that that sector was just settling down with the reforms instiuted by his predecessor, Professor Charles Soludo.

Sanusi unveiled a ten-year reform plan based on four points for the stabilization of the banking sector and the finance sector in general. According to him, the four programmes for the sector's transformation involves enhancing the quality of banks; establishing financial stability; enabling healthy financial sector evolution and ensuring that financial sector contributes to the real economy.

In the insurance sector, capital base requirement for life insurers was raised from 150m Naira to 2bn Naira, general insurers to 3bn Naira from 200m Naira, and for reinsurers it moved from 350m to 10bn Naira. This sub-sector offers insurance cover for various types of risks. Most non-life businesses cover risks such as fire, burglary, marine, accident, engineering, workmen's compensation and loss of income; while most life businesses offer life assurance.

By raising the bar thus, the industry has been successfully rid of players who had ben sucking the life blood of the industry. This is even more graphically reflected on the number of insurance companies operating in the country. Hitherto, there were about 128 insurance companies in Nigeria and everywhere you looked there was an insurance firm. But after raising the bar, the number went down to 62, and many of them are not stand alone companies; some are dual companies. If you are talking about insurance companies we don't have more than 29.

That is the effect of the action of government raising the bar of capital and, since then, we have begun to have a semblance of sanity in the insurance industry. We now have the emergence of serious companies that are listed on the Stock Exchange. We have over 30 insurance companies listed on the stock market now, and they are doing very well despite the global meltdown that has affected global investments worldwide.

The composite business, which has a new minimum capital base of N5bn Naira (2bn Naira for life assurance and 3bn Naira for general insurance), is growing rapidly with significant number of insurance companies now underwriting both life and non-life risks. The business is expected to grow even more with the passage of the oil and gas local content policy, as the insurance companies are expected to handle a huge part of the underwriting in Nigeria.The financial services industry is highly regulated by the following bodies: The Nigerian Accounting Standard Board, Central Bank of Nigeria, Nigerian Deposit Insurance Corporation, National Insurance Commission, amongst others.

Despite the work done and still being done by these bodies, problems still persist, chief of which is poor perception of the industry by the public, which in turn has led to poor patronage.

As a result, things taken for granted by insurance firms in other climes look like innovation here. If a man tells his friend or wife that he wants to take a life policy, the response would be that he just wanted to waste his money, and if he had no use for it, could he give it to them who can use it better, rather than 'dash'an insurance firm! Also, relative to the population, very few people here take life policies.

Apart from that, the closest the ordinary man comes to the insurance sector is when he buys a car; it is only in Nigeria that some people buy brand new cars and take out third party covers for them.