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19 March 2015 Myra Rego
Myra Rego, FAnews Journalist

Myra Rego, FAnews Journalist

Inseta Team at  SA’s Broker Development programme launch

Inseta Team at SA’s Broker Development programme launch

Small and Medium-sized Enterprises (SMEs) have flourished over the years. However, it is evident that certain threats have and continue to place them at risk.

With the regulatory and environmental changes in South Africa, not to mention the stagnating economic climate and high levels of unemployment, it is important to ensure that SME brokerages are fully equipped with the necessary skills and models for continued growth and success.

One of the benefits of being an insurance broker is the opportunity for professional growth. Through constant learning and honing of skills a broker can expand his or her knowledge, assume higher levels of responsibility and ultimately serve customers better.

The levels of achievement are a matter of personal ambition and aptitude, but there is no shortage of options and structured industry training programmes are likely to help the broker gain more knowledge, skills and expertise.

FAnews recently attended the launch of the Insurance Sector Education and Training Authority (Inseta), together with ASISA, Edge Growth and Encore SA’s Broker Development programme and chatted to Sandra Dunn, Chief Executive Officer of Inseta, and Neesha Naidoo, Project Office Manager at Inseta about the aim of the programme and its benefits to brokerages.

Maximising on opportunities

Lifelong learning in terms of adapting to change and integration is critical. By investing in the growth and development of brokerages, the insurance industry can grow and sustainability can be reached.

This is exactly what Inseta wants to achieve with its Broker Development programme which aims to develop SME brokerages to supplement the quality of scarce and critical skills with the insurance industry.

Inseta’s research into the industry as well as the many anecdotal reports encountered on a day-to-day basis, indicate that there are a number of challenges of particular concern to smaller companies such as: 

  • Direct channels of intermediation in the industry and increasing regulation, which threaten the sustainability of the intermediary sector;
  • A need for relevant skills in business acumen; and
  • The lack of adequate resources and support including access to capital, technology, administrative support and management capacity. 

“SME brokers face unique challenges in the face of competition with larger and more established brokerages, as well as with the advancements in technology and move towards the face-to-face client interface, which poses a risk to intermediation. In addition, increasing regulation, while enhancing professionalism of the industry, also poses a barrier to the smaller enterprises that are hit harder in compliance than their larger counterparts,” said Naidoo.

The critical steps are to create maximum shared value for the industry, brokers and society, to ensure that brokerages are sustainable by providing the best practice business development support.

It is also important to benchmark optimal approaches to broker development to create scalable systematic change.

Through these steps brokerages will receive support in that diagnostics will be conducted to determine weaknesses and growth inhibitors. This will allow for a strategy and plan to be placed according to each brokerage need. Through, research design, broker models and actions may be applied and recommendations will be made for optimal approaches to broker development.

Identifying threats and opportunities

According to Naidoo, by providing specialist business development support to SME brokerages within the insurance sector, entrepreneurship and business acumen can be developed in order to enhance the net profitability, transformation and sustainability of the insurance industry. With a strategic plan that leverages the brokerage’s strengths and weaknesses, the brokerage can minimise the threats and exploit the opportunities.

Dunn says broker development support is something that smaller brokers, countrywide have for a very long time pleaded for. “The primary mandate is skills development as well as a focus on interventions to address key industry issues and we are very pleased to be part of spearheading this broker development programme, which also touches on national priorities for entreneurship development,” she said.

Dunn continued to say that brokers generally need to continue upping their game to stay ahead of competitors. “Brokers need to become leaner, more cost conscious and focused on compliance in order to survive and meet their customers’ needs in the current and future consumer focused environment. Brokers now require specific qualifications, transparency and professional advice which have placed huge pressure on them. The segment hardest hit by direct channels and increasing and stiffer regulation is the small and medium brokers. Challenges of sustainability face brokers irrespective of their line of business,” she said. 

Naidoo and Dunn agree that with programs like these, candidate-brokerages are given a firm foundation to survive in a competitive environment through stronger business skills as well as soft leadership skills. 

As profitability of businesses, retaining talent and responding to legislative demands are only some of the challenges which threaten the sustainability of small brokerages; Naidoo pointed out that insurance players should support the growth of the intermediary sector. While innovation is needed to support brokers towards developing the business acumen and necessary skills that will lead to the optimal growth of their businesses, maintaining ethics and focusing on customer care, will be the focal point of legislation facing the intermediary sector.

Editor’s Thoughts:

To support sustainability it is critical to nourish the working environment. It is important to bring in young talent with fresh new skills and approaches, but it is also just as important to enhance the talent that already exists in the industry. By doing so, development and growth is constant, thereby increasing the insurance industry pool. Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts myra@fanews.co.za.

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