Selling the insurance industry

17 August 2007 The South African Financial Services Intermediarie

With the regulators intent on raising the standard of financial advice given in South Africa, more than ever it's vital that the insurance industry attracts individuals of quality. But in an era where kids want to be rock stars/movie stars/ or Paris Hilton, it's no wonder, given its deeply unsexy image, the industry is having considerable difficulty attracting its share of top talent.

Technology has done a lot for the insurance industry over the years, but if were honest, the term insurance salesman still conjures up an image of a bean counter with a brief case and grey shoes; only ever so slightly elevated above the ubiquitous reps selling anything from vacuum cleaners to timeshare.

It's not that we don't see the need for insurance, it's perhaps that we don't like admitting the fact that the future is completely beyond our control.

"Insurance will always be a grudge purchase; at least until the inevitable such as crime, disability, damage and death happens, reaffirming its importance and even then, the negative associations continue to count against it," says Ben Tonkin, Corporate and Commercial Technical Committee chair of the SA Financial Services Intermediaries Association (SAFSIA).

"That's why the industry is not generally seen as a first choice by most graduates when it comes to picking careers and many wind up in it by default."

The advent of direct insurance has also played a role in reducing the vitally important role of trusted intermediary and financial advisor to that of a call-centre script reader, belying the crucial importance of the industry to the sustainability of our economy.

"Few people know that the insurance industry employs close on 100 000 skilled individuals who contribute around 5% of GDP and preside over hundreds of billions of Rands of our nation's savings," says Tonkin.

Desperately needed: An image overhaul

It's easy to understand then why the industry is in such desperate need of highly-skilled individuals and an image overhaul that will attract them. The perception of a boring job is in sharp contrast to the reality of a career that offers fantastically challenging prospects, such as resolving the insurance issues created by anything from hurricanes in the US to crime here in South Africa.

The best minds in the business are clearly needed to navigate the industry through the insurance implications created by our unpredictable world. And if disasters related to global warming forecasts are anything to go by, not to mention the increase in wars and conflicts, things have only just begun to get interesting.

What's being done to attract people?

Efforts to attract people to the industry center mostly around image management and graduate-recruitment programmes. Some companies have initiated their own active programmes aimed at recruiting graduates and even reaching school-leavers, informing them about the various career paths that exist within the industry. These include: actuarial science, chartered accountancy, financial planning, human resources, marketing, training, information technology, internal auditing, forensic services and law.

According to an article entitled Addressing the skills shortage (The Times, 8 July 2007), learnerships are another key way in which companies are drawing people to the insurance industry. A Liberty Life initiative sees around 80 unemployed matriculants from Johannesburg taking part in a year-long programme that combines theory (at Boston and Intec colleges) and practice in the office environment.

The article says, "By the end of the year, most candidates, (by then) in possession of NQF Level 4 qualifications, are offered a position in Liberty Life's Johannesburg office, either temporary or permanent, with extremely good reviews of their performance being received."

Old Mutual's learnership programme is also aimed at unemployed matriculants, recruiting around 200 each year from around South Africa. Following their 12-month programme, most of the learners take up positions in the company's call-centre and its sales team, posting an 80% retention rate.

Beyond programmes aimed at equipping entry-level employees, the industry is also very concerned with attracting more senior individuals to its ranks.

The Insurance Sector Education and Training Authority (INSETA) oversees and sponsors training in the industry. According to Caroline da Silva, head of Portfolio Management at Santam, training is generally quite expensive because there are few providers, leaving it up to organisations to hone the skills of their own employees. Nevertheless, there is a great focus at present on increasing managerial and leadership skills.

"In 2002, INSETA engaged with the University of Cape Town's Graduate School of Business (GSB) to develop two leadership and executive development programmes for the industry, one aimed at senior leadership and the second at middle management," says da Silva. "Teaching insurers more about everything from diversity to Black Economic Empowerment, globalisation and systems thinking, helps raise the bar within the industry, making it more attractive to skilled outsiders."

As with other industries in the uniquely South African context, there is a pressing need to attract and upskill more black individuals, as well as women, to ensure greater diversity in the workplace. The fact that more than half of all insurance sector employees are white (according to an INSETA report) places even greater emphasis on training.

"It's not surprising therefore that companies are doing all they can to increase the pool of qualified individuals who're ready to enter the industry," says da Silva, "But very real challenges persist in terms of basic numeracy and analytical skills that are in increasingly short supply."

"There's clearly no quick-fix solution to this problem," says Tonkin, "but the various programmes being run by industry organisations in a bid to transform it are beginning to bear fruit. We're convinced that over time, the face of the industry - indeed its very image in society - will become attractive to more youngsters."

It may, however, be some time yet before children dressed up in their parents' suits are seen playing 'insurance salesman-insurance salesman'.

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