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Skills - the missing link in SA's insurance sector

01 October 2009 Michael Blain, Centriq Insurance

"We need to start thinking for ourselves again" - Micheal Blain

Like many other industries in South Africa today, the insurance industry is faced with severe shortage of skills. It is evident that in a highly regulated industry ehere there is no room for human error, we cannot afford to ignore the lack of skills any longer. There is a drastic need for skills preservation and development within South Africa's short-term insurance industry.

Here are some of the challenges the industry is facing.

Climbing the ladder too soon

In South Africa, managers in most industries are promoted much sooner and at a younger age than their peers in developed economies. This means that managers are not as well groomed to take on the responsibilities associated with a higher position. They have to make it on their own while lacking insight into the art of strategic management and decision-making – the makings of a good manager.

Lack of apprenticeship

There seems to be a culture of entitlement where job seekers have expectations of high salaries, luxury cars, rapid promotion and status. Gone is the era of apprenticeship to learn a craft - today, everyone wants instant gratification.

Poaching and job hopping

We've entered a day and age where employees aren't loyal towards their employers anymore. Many employees seem to only focus on the here and now, boasting a "what's-in it-for-me" attitude. Hence skills poaching and job hopping have become a harsh reality.

Mergers

Industry consolidation is another factor to be taken into consideration when it comes to the shortage of skills in the insurance field. Fewer of the traditional large multi-line insurers, which can easily be regarded as the training grounds of the previous generations, are still active today.

Therefore, the blind are leading the blind as skills development is left to the partially-trained with limited experience. And so a viscous cycle evolves in which the next generation of skills is trained with large gaps in knowledge and industry custom.

Lack of interest

Little is understood about the industry we operate in. In the past, insurance was seen as the poor cousin of the banking industry, with few role models or icons to emulate or aspire to.

Although this outlook is slowly but surely starting to change, short term insurance remains a foreign concept to the vast majority of the South African population. Insurance qualifications are furthermore not held in sufficiently high esteem, making it a less obvious career choice for many school leavers.

Loss of status

The fact that most of the associations and professional bodies within the insurance industry have lost their status further contributes to the overall negative perception of the sector.

Modern technology

Modern age also plays a role. In a technologically advanced, fast-paced world, we rely on computers to do complex work. Call centre scripts tell telemarketers what to say while computer programmes are used for underwriting and rating models. People no longer think for themselves. They don't document or record how they actually do their work. Hence there is no frame of reference for future generations to follow.

Standing up to the challenge

Overall, I'm quite positive about the future of South Africa's short-term insurance industry. Regulation will enforce a higher level of skills within the sector. By restoring the credibility and standing of professional bodies and associations among others, the negative perception of the sector can sufficiently be addressed.

These associations will also help to make insurance visible and attractive as a career choice again.

Other solutions include:

Rewarding those with expertise for transferring their knowledge to other individuals within companies and at industry level. We need to motivate employees to share their skills. This can easily be done internally – just think innovatively. What about a monetary prize for the best technical or industry related article submitted to industry specific publications, for example? This will encourage employees to study their trade.

Forums for young future leaders to share their expertise and skills should also be established and promoted. That way, we can build a new and vibrant culture around insurance.

The importing of experienced personnel from developed economies with the aim to transfer skills and knowledge to South African employees and rigorous succession planning are other feasible options to address the lack of skills within the insurance industry.

We furthermore need to retain our skills by looking after those whom we employ. Attractive, yet market related salaries and company benefits, good working conditions as well as personal growth and job opportunities will help slow down the brain drain.

Poaching, which has become a sad necessity in South Africa's insurance industry due to the severe shortage of skills, should also be addressed. Organisations should not have to fear that their new trainees will be poached before their investment yields returns.

That said, I strongly believe that an industry ‘rules of engagement' needs to be drawn up whereby all role players agree to foster the growth of skills in a neutral zone where trainees can focus on acquiring the necessary skills and experience within the industry.

Statistics reveal all

It comes as no surprise that South Africa's insurance sector is rated third in the Careers24 scarce business and leadership online skills survey conducted recently.

According to South Africa's Insurance Sector Education and Training Authority's (INSETA) scarce and critical skills report for 2007/8, in which scarce skills data from 458 organisations within the insurance sector was analysed, a total of 229 managerial positions, among others, could not be filled due to a scarcity of skills.

Critical skills shortages in the administrative staff category as far as call centre operators, client and claims services, relationship administrators, insurance agents and telemarketers are concerned were also captured in the report, noting a severe shortage of underwriting skills.

Other specific professional positions that participating organisations had difficulty filling during 2007/8 included insurance broker (851 vacancies), financial investment advisor (388 vacancies), marketing specialist (202 vacancies), claims assessor (66 vacancies) and business analyst (48 vacancies) positions, to name but a few.

In the managerial category, INSETA highlighted the lack of appropriate experience and required qualifications, as well as changes in legislation, as the main skills shortage and poaching triggers within the insurance industry.

New entrants with qualifications but no experience and experienced people with "incorrect" or no formal qualifications will remain one of the biggest challenges facing the insurance sector this year.

Quick Polls

QUESTION

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ANSWER

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