Business chal­lenges

The Star Early Edition - - THE WORKPLACE REPORT -

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.

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