Saturday, January 22, 2022

Skills shortage a challenge to insurance industry

Botswana and the rest of the world face skills shortages in the insurance industry and this hampers growth especially in life segment, a pan African insurers’ conference was told this week.

Actuarial Manager at Botswana Life, Sethunya Molosiwa said at the Organisation of Eastern and Southern Africa Insurers’ 37th Annual Conference in Gaborone that skills that are currently in short supply include actuaries, insurance accountants, software developers and insurance professionals.

She said this is made worse as African companies compete with international entities that are willing to pay over the odds to attract the best and limited talent.

“There is a serious shortage of the skills necessary to fully develop the life insurance industry on the continent,” revealed Molosiwa.

“Some of the shortage is global and therefore African companies find themselves competing for qualified resources with multinationals from developed countries,” she said.

Other challenges facing growth and inclusion include lack of trust in the insurance industry by consumers, lack of competition and limited competitor data in the market.

At a regulatory level, Molosiwa said enabling regulation is another challenge as compliance comes with costs. She reminded the conference that growth in some of the more developed insurance markets was supported by conducive tax legislation such as tax credits of life insurance premiums.

She said these incentives while withdrawn in most forms in most territories have enabled the growth of the industry and revealed that the developing markets are trying to play catch up to developed markets regulatory requirements before their markets are not ready.

“Increasing regulatory requirements are coming with additional costs to compliance which will make life insurance products unaffordable for certain sectors of the market”.

However, Molosiwa told the conference that attracted 179 participants that there is a massive opportunity to grow the insurance industry in Africa with the growing middle class.

With 600 million expected to have mobile phones by the end of 2014 and the use of technology, which reduces costs, Molosiwa said it makes it easier to collect and access insurance products.
Chief Executive Officer of Nairobi based College of Insurance, Ben Kajwang told the conference of the need to embrace Continuous Professional Development (CPD) in a bid to develop capacity.

The concept was introduced by United Nations Educational, Scientific and Cultural Organization (UNESCO) in the 1960’s amidst pressure for expansion of education opportunities, especially in developing countries.

The programme is a knowledge and experience that you gain both formally and informally as you work, beyond any initial training.

“CPD therefore, seeks to formalize what most professionals are already doing, enabling development to be structured in a way that meets the needs of the industry they are serving,” revealed Kajwang.

“CPD is seen as essential to effective practice and to an individual’s development within the profession whether or not that results in career progression”

Just like skills development, most African countries faces the challenge of implementing and enforcing the programs without legal backing since CPD is not provided for in their legal frameworks.

“The financial resources necessary for CPD are usually perceived as part of the operational costs of the organization thereby making it to be treated as an option and not a requirement.”
The other problems is that CPD not sufficiently recognised as helping professional improvement and most countries especially among the insurance professionals where access to reading materials and other resources is limited.

Kajwang said to further facilitate the development of CPD in Africa, there is need to give CPD legitimacy by establishing legal framework for CPD where this has not been done.

“The aim should be to make CPD obligatory for all insurance practitioners,” he said. “The culture of life-long learning should also be inculcated into the insurance practitioners during their formal training to ensure continual search for new knowledge.”

He however sees CPD in Africa as evolving despite the numerous challenges that most countries are facing.

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