PERSONAL LINES insurers are feeling the pinch of the economic downturn and the depressed housing market. These are intensified by continued premium increases. Industry observers predict several changes over the next five years:
Greater commoditisation (customers perceive little or no difference between insurance brands). Decreased profitability. Automated underwriting. Greater use of technology. More proactive loss control. Dis-intermediation. Multiple distribution channels.
The commercial lines market is more stable, with growing capacity and improved risk management. However, it is facing changes such as:
The rise of virtual business affinity groups. Automated underwriting. Transformation of business models.
Transformation difficulties appear to relate mostly to the challenge of finding black candidates with the desire and the skills to embark upon a career in the short-term insurance market, filling either specialist or management roles.
Moreover, the insurance industry is not seen as a chosen career; most people arrive in the industry by default.
The image of the industry increase the poaching of skills.
They believed that if all companies and associations worked together, such an accord could benefit the entire industry and not just those “with bigger cheque books”.
Dunn acknowledges there’s much work ahead in terms of skills development, but she is needs to be improved, with additional focus on increased professionalism.
This may make the insurance industry more attractive to employment equity candidates.
Short-term sector predictions for the next five years
Industry leaders identified six key drivers that will continue to affect the industry over the foreseeable future.
Increasing regulation and the rising cost of compliance will put pressure on the need for qualified, skilled compliance officers.
The emerging upwardly mobile professionals and related market segments will drive a shift towards greater use of technology and social media, as well as direct selling in the personal lines market.
As new technologies emerge and big data takes on greater significance, more innovative companies will gain a competitive edge.
The need to develop and retain specialised professional and management skills within the industry will be a challenge.
The revised broad-based BEE scorecard will intensify pressure on companies to meet the demand for social and economic transformation.
Companies will increasingly seek opportunities to expand into Africa. pleased that the respondents perceive Inseta and the Insurance Institute of South Africa as having the greatest impact with regard to increasing skills levels and professionalism in the short-term insurance industry.
For more information, visit www.inseta.org.za.