Increasing regulation lessens appetite for insurance jobs

While the financial services sector in South Africa recognises the need for stricter regulation to ensure compliance and quality standards, the increasing pace of change is having a negative impact on the promotion of career opportunities and entrepreneur

This is according to Steven Isaacs, Gauteng Regional Manager at Lion of Africa Insurance, who says that skills and knowledge is declining in the insurance industry and ever-increasing regulation is having a negative impact on promoting entrepreneurial appetite and the establishment of new brokerage firms.

“Despite the many benefits that can be derived from implementing regulation, we need to avoid the danger of being overregulated to such an extent that it negatively affects the growth and sustainability of the industry,” adds Isaacs.

“We are likely to see more consolidations with insurers and smaller brokers. This will directly impact on future job creation, and the banking sector will solely be responsible for creating jobs within the financial services sector.”

He explains that tough economic conditions coupled with ever increasing regulation are making the insurance industry less appealing to entrepreneurs and young people that are looking for career opportunities.

Isaacs says that young people, who want to pursue careers within the financial services industry, first have to complete a tertiary qualification, followed by a compulsory level 1 regulatory examination on the Financial Advisory and Intermediary Services (FIAS) Act, within two years of appointment or approval.

“What is more concerning is that we are dealing with this issue at a critical time when the insurance industry is still grappling with constraints due to the slow pace of transformation.

“Furthermore, there seems to be no coherent plan to transfer knowledge to the younger generation in the industry. We are currently sitting with a lot of experienced professionals that have reached retirement age, but are still active in the industry due to a shortage of skills and experience,” concludes Isaacs.