BATANAI MATSIKA
One important topic of discussion at the 2021 OESAI Conference had to do with capacity building and skills development in the insurance sector.
The paper was presented by Saul Sseremba, CEO of the Insurance Training College (Uganda). Generally, there was consensus amongst participants that globalisation has disrupted knowledge creation and that there is no monopoly of knowledge in the new environment.
This implies that there is a need to constantly create new knowledge about operations and systems. In addition, insurance players will have to make deliberate moves to invest in critical skills development. The new normal following the Covid-19 pandemic meant that (i) employees can now work from home, (ii) customers are demanding more for less and (iii) some businesses are closing. Some of the forces shaping the future of the insurance industry include;
- Tough Regulation;
- Fast Changing Technology;
- Low awareness and trust levels;
- High customer expectations;
- Stiff Competition;
- Rising incidences of Fraud; and
- High rate of human capital obsolescence
A look at the insurance sector labour market in Africa reveals that of the total work force, a large percentage are unintentional workers. It is also estimated that 40% of the workforce in the sector will become eligible for retirement in the next 3 years. In addition, insurance professionals aged between 55 and above have increased by 74% over the years. According to McKinsey & Co, 28% of the workforce in the sector are below 35 years. There has also been several changes in the market environment detailed hereunder;
- Poaching and job hopping
Employees are no longer loyal toward their employers and readily change jobs to improve their situation in the short-term. Meanwhile, insurers respond to the skills shortage by actively poaching staff.
- Lack of interest
School leavers generally have little knowledge about or interest in the insurance industry. Many job seekers land in the industry almost by accident, or switch from another financial services sector such as banking or accounting.
- Traditional training grounds have largely disappeared
Industry consolidation has eliminated many of the traditional large multi-line insurers that gave previous generations an apprenticeship opportunity. In the new environment, skills development is largely the responsibility of partially-trained managers with limited experience and with large gaps in knowledge. This problem is exacerbated by a culture of entitlement among job seekers who expect high salaries, luxury cars, rapid promotion and status.
- Lack of quality management prospects
There is evidence of difficulties in finding suitable candidates for middle and senior management positions. In some instances, it is easier to find a suitable candidate for a senior directorship position than it is to find a candidate with suitable qualifications and skill sets for middle or senior management. People are often placed in these positions before they are ready to assume the responsibilities attached to the role.
- High cost of training
Internal company training programmes are expensive and time-consuming, and trained candidates are very likely to be poached by competitors at the end of the process.
Overall, there is need for insurance companies in Africa to establish forums for young future leaders to develop and share their expertise and skills. In addition, in-house training programmes have strong advantages as it involves growing needed skill sets using internal resources. For example, on-the-job training that enhances an employee’s skills and prepares them for the next promotion is generally far superior to a public seminar. This approach ensures more natural, lasting knowledge transfer for trainees, while the employee providing the training cements their own learning in the process. Internal training also reflects a solid knowledge of the organisations culture as it uses real life examples and problems that participants encounter every day at work. Successful internal training also identifies the exact skills and knowledge that participants need to succeed in their jobs.
In Zimbabwe, the Insurance & Pensions Commission of Zimbabwe (IPEC) promotes institutional capacity development within the insurance industry. IPEC has embarked on several institutional capacity development measures, which include arranging training and mentorship from organisations such the World Bank Group, MEFMI, the Toronto Centre and attendance of regional and international meetings.
All in all, the onus remains on insurance industry players to deliberately invest in skills development and capacity building in the new information-age era. Research has shown that a 1.0% increase in training leads to an approximate 3.0% increase in productivity. We contend that training and development is the new tool that players will need not only to grow but survive in the insurance industry.
Batanai Matsika is the Head of Research at Morgan & Co, and Founder of piggybankadvisor.com. He can be reached on +263 78 358 4745 or batanai@morganzim.com / batanai@piggybankadvisor.com
