Budget 2011: Short-term insurance sector to benefit from infrastructure and skills development funding

Adam Samie, CEO of Lion of Africa Insurance

The R10.3 billion set aside for infrastructure - which includes an allocation of R2.5 billion to municipalities for public transport systems and infrastructure - and governments commitment to skills development via its Sector Education and Training Authorities (SETA's) announced in the 2011 Budget Speech will both have a positive impact on the growth of South Africa's short-term insurance sector.

This is according to Adam Samie, CEO of Lion of Africa Insurance, who says improved infrastructure will mitigate risks from a disaster management perspective. The need for this infrastructure improvement was highlighted by the recent flooding across South Africa which caused severe damage and hampered service delivery.

New infrastructure projects will require more public / private partnerships between government and insurers, which will have a positive impact on the short-term insurance sector. Improved infrastructure will also enable South Africa to build on recent successes, such as the hosting of the 2010 FIFA World Cup, and attract additional global business and events. This will have a spin-off effect on the local insurance sector, which will be required to put in place additional risk solutions.

Samie also welcomed increased funding for SETA's to aid skills development in the country, citing the insurance SETA (INSETA) as a notable player in the financial services space. There is currently a massive shortage of skills in the short-term insurance space and increased funding for skills providers has the potential to change the face of our industry.

He says that skills development also needs to go hand in hand with transformation in order for the country's financial services sector to evolve. As a Level 1 BBBEE operator we are at the centre of the transformation debate and understand the importance of skills development programmes in creating economic opportunities for a greater number of South Africans.

Samie says that overall, the insurance sector can be satisfied with the 2011 Budget Speech. Finance Minister Gordhan has succeeded in creating a positive vision for the future and the onus is now on key industry role players to support this vision.