by Zenhrea Damon

Insurance industry growth

New research shows an increase in the industry in the face of turbulent changes

INSETA has indicated an influx of human capital into the sector
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New research by the Insurance Sector Education and Training Authority (INSETA), shows that in the 2011–2012 period, despite a large decline of human capital in the insurance sector, it has continued to grow.

By comparing the information from workplace skills plan surveys of over 927 small, medium and large insurance employers in the 2011–2012 time period, INSETA says that its research shows the sector is continuing to grow in the face of the turbulent changes brought on by the Financial Advisory and Intermediary Services (FAIS) legislation. While 17 187 employees left the companies surveyed, the industry still grew by 22 478 workers.

The research revealed that FAIS compliance has had both a negative and positive impact from the employers’ points of view.

One of the survey participants stated that they have found the legislation has brought about awareness among the staff of the importance of compliance to the relevant acts. “In the past, the attitude among staff members has been complacent toward efforts by the company to improve skills levels.

"However, legislation has forced staff members to be compliant – and through this, they have discovered how relevant legislation is for the security of the industry,” the participant said.

Chief executive of INSETA, Sandra Dunn, says that that the large influx of new employers is an extremely positive indicator for the sector, and shows that the insurance industry is shedding the image of 'formality' that has proven a barrier to entry in the past.

She believes, however, that the significant number of people leaving the sector, especially the loss of skills, could prove problematic in the future if it continues to go unchecked.

Resignations accounted for the highest percentage of leavers – a total of 14 276 people. INSETA says that companies indicated this was mostly a result of dissatisfaction with the FAIS legislation, and the compliance requirements.

“A large majority of the resignations came from employees who were simply fed up with having to take exams at this stage of their lives, and dismissals were largely due to workers’ inability to meet the compliance requirements in passing exams,” says Adeline Singh, manager of the Skills Planning, Research and Development division at INSETA, and co-ordinator of the research.

Dunn believes that “increased resignations, especially from people with technical expertise, could have negative consequences for the industry, and thus the wider economy; legislation is an extremely important evolution for the sector, and needs to be seen through in order to ensure the South African insurance sector is able to maintain itself as a responsible body that is able to promote growth in the industry.

"Our research showed that while almost all the employers are in agreement on this, it is proving far harder to regulate employees in this regard.” 

One research participant stated that the work environment showed a substantially increased level of stress and loss of productivity, especially in those employees who were having difficulty in passing the exam: “A percentage of representatives in the industry will not pass their exams, and I would anticipate an even greater shortage of skills – creating a situation where it will be extremely difficult to replace those we lose”.

Another stated that, “From a negative point of view, legislation has caused high levels of stress among staff members and the pressure to pass exams (especially those who have some kind of learning disability and are not academically inclined) has been massive to the extent that some people have resigned. This has related especially to people who don’t speak English as a first language.”

As a result, INSETA's research unit will be comparing all new data going forward to ensure any potential issues are addressed at the earliest possible chance. “We’ve identified several key areas of skills that need to be developed, and are looking into ways to ensure this is done.

"These skills include: information and communication technology developers and programmers, insurance underwriters, actuaries, insurance loss adjustors, and insurance claims investigator. Going forward, we will use future research to help inform what training we provide, so that the industry skills that are being lost through resignations can be replaced,” says Singh.


For more information, contact the Insurance Sector Education and Training Authority (INSETA) on 011 544 2000 or visit www.inseta.org.za.

 

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