New research shows insurance industry growing
New research by the Insurance Sector Education and Training Authority (INSETA), shows that in the 2011 to 2012 period, despite a large number of resignations and dismissals largely attributable to issues surrounding the new legislation, the insurance sect
By comparing the information from workplace skills plan surveys of over 927 small, medium and large insurance employers in the 2011 and 2012 time period, INSETA says that their research shows the sector is continuing to grow in the face of the turbulent changes brought on by the FAIS legislation. While 17 187 employees left the companies surveyed, the industry still grew by 22 478 workers.
The research revealed that FAIS compliance has had both negative and positive impact from the employers’ points of view. One of the survey participants stated that they have found that the legislation has brought about awareness among the staff of the importance of compliance to the relevant acts, “in the past the attitude among staff members has been complacent towards efforts by the company that improve skills levels. However, legislation has forced staff members to be compliant and through this, they have discovered how relevant legislation is for the security of the industry,” the participant said.
CEO of INSETA, Sandra Dunn, says that that the large influx of new employers is an extremely positive indicator for the sector, and shows that the insurance industry is shedding the image of “formality” that has proven a barrier to entry in the past. However, Dunn believes that the significant number of people leaving of the sector, especially the loss of skills, could prove problematic in the future if it continues to go unchecked.
Resignations accounted for the highest percentage of leavers, a total of 14 276 people. INSETA says that companies indicated that this was mostly a result of dissatisfaction with the FAIS legislation, and the compliance requirements. “A large majority of the resignations came from employees who were simply fed up with having to take exams at this stage of their lives, and dismissals were largely due to workers’ inability to meet the compliance requirements in passing exams,” says Adeline Singh, manager of Skills Planning, Research and Development division at INSETA, and co-ordinator of the research.
Dunn believes that “increased resignations, especially from people with technical expertise, could have negative consequences for the industry, and thus the wider economy; legislation is a extremely important evolution for the sector, and needs to be seen through in order to ensure that the South African insurance sector is able to maintain itself as a responsible body that is able to promote growth in the industry. Our research showed that while almost all the employers are in agreement on this, it is proving far harder to regulate employees in this regard.”
One research participant stated that the work environment showed a substantially increased level of stress and loss of productivity, especially in those employees who were having difficulty in passing the exam: “a percentage of representatives in the industry will not pass their exams, and I would anticipate an even greater shortage of skills, creating a situation where it will be extremely difficult to replace those we lose”. Another stated that “from a negative point of view, legislation has caused high levels of stress among staff members and the pressure to pass exams (especially those who have some kind of learning disability and are not academically inclined) has been massive to the extent that some people have resigned. This has related especially to people who don’t speak English first language.”
As a result INSETAs research unit will be comparing all new data going forward to ensure that any potential issues are addressed at the earliest possible chance, “We’ve identified several key areas of skills that need to be developed, and are looking into ways to ensure that this is done. These skills include: ICT developers and programmers, insurance underwriters, actuaries, insurance loss adjustors, and insurance claims investigator. Going forward, we will use future research to help inform what training we provide, so that the industry skills that are being lost through resignations can be replaced,” says Singh.
