By Henry Uche, [email protected],
Stakeholders in the insurance industry have expressed concern over the low level of insurance penetration in Africa and Nigeria in particular.
They argued that the one per cent insurance penetrartion in Nigeria was abysmally low for the so-called giant of Africa with a contribution to real GDP recording 5.35 per cent, according to National Bureau of Statistics, Q1 figures for 2023.
It was for this reason and many more targeted at reversing the negative trend and improving insurance penetration for Africa that the African Insurance Organization (AIO) recently organised a one-day webinar.
The experts submitted that four critical issues needed to be addressed urgently.
The issues are; human capital development which, it said, must be given top priority as an engine for insurance growth; the need to bridge the gap between academia and professional practice; innovation and re- engineering must take the center stage, while drifts in customer service and its impact on service delivery must be looked into head-on.
According to a global insurance market report from Stats anf Facts, insurance penetration in South Africa stands at 12.2 per cent (highest in Africa); Kenya 2.9 per cent, Ghana 1.2 per cent, while United Kingdom is ranked third by life and none-life direct Premium Written globally, surpassed only by the U.S and China, while Taiwan is leading in Asia.
However, despite all efforts to boost penetration, Signé (2001) is of the view that the aggregate insurance penetration in Africa is 2.78 per cent in 2019, which is very low compared with the global average insurance rate of 7.23 per cent, a sign of poor insurance culture in Africa. However it is believed that with the volatile environment we all live in, coupled with climate change, natural disaster, technological advancement among others, new entrants in the market such as Takaful insurance, will help boost the average insurance penetration in Africa.
Taking the centre stage, the pioneer Rector, College of Insurance and Financial Management (CIFM) in Ogun State, Dr. Yeside Oyetayo, reminded AIO that Human Capital Development through capacity building is critical to boost efficiency and effectiveness. According to her, of all ages, human capital has remained the most invaluable and intangible asset of any organization and a basis for competition. She added that investing in people is the most important decision business leaders can take.
The erstwhile Rector alerted AIO to go back to the drawing board by building human resources if the industry must make any headway.
Oyetayo maintained that since insurance is the infrastructural pillar of any economy, human capital remains an intrinsic part of every organisation and very essential to the development of African Insurance Industry.
According to her, the rate of changes brought about by technology (in this instance -Insurtech) in the world of work has necessitated the need for specialised skill sets. The insurance educator who is also the Managing Principal Partner, SOEYA Consult Nigeria, affirmed that though the journey to manpower development in the Africa Insurance has been fraught with various challenges, howbeit, it is not a challenge insurmountable.
The insurance educationist recalled that the first initiative by United Nations Conference on Trade And Development (UNCTAD) in Africa to address this problem (dearth of robust human capital) informed the establishment of the Insurance Institute in Yaoundé (IIA) in 1972 for CIMA members.
The second, she added, was the establishment of the West African Insurance Institute (WAII) in 1973 by West African Insurance Companies Association (WAICA) in collaboration with UNCTAD. Further efforts in manpower development came with the establishment in Colleges of insurance in Kenya, Ghana, Nigeria, Senegal, Ethiopia, Tanzania with the main objective of training and research.
The challenges in human capital development in African Insurance Industry, according to her remains the inability to develop home-grown skills relevant to our peculiar.
Other constraints are; the effect of obsolete modus operandi; inability to attract and retain specialised skillsets due to poor remuneration package of the industry; inadequate funding and capitalisation for human capital development.
She added that limited industry ability to design and roll out products that are relevant to their markets, use of staff who have not been reskilled for the changing business environment and future industry demands as well as aging workforce- underwriters, claims adjusters.
She added that achieving growth in the All through the instrumentality of human capital development requires synergy and advocacy. “We need Intra -African partnership and collaboration amongst insurance training institutions, international organisations such as; ILO, GIZ, governments – Budgeting and capitalisation of insurance training.
“Local markets need to support research and promote career opportunities, while universities and insurance training institutions in Africa must review curriculums in line with the growing realities” She added, “We need Mandatory Continuous Professional Training Programmes, attractive remuneration packages to bring in more young people into the industry and Intra -African research that enables the identification of skill gaps and leveraging of skills within the continent.”
For the Chief Executive Officer, Institute Interafricain De Formation en Assurance et en Gestion des Enterprises IFAGE (Senegal), Mrs. Rokhaya Kandji, there was need to bridge the gap between academia and real life professional practice.
According to her, though insurance training institutes in the bloc have evolved over time, however the main goal remains to prepare young entrants (budding practitioners) for the inevitable cum dynamic challenges ahead.
Bridging this gap by her findings requires conscious internship programs, industry collaboration, curriculum upgrade and alignment with realities, real case studies in the coursework, allowing students to apply theoretical knowledge to practical scenarios commonly encountered in the sector.
Other ways and means are through mentorship programs where students are connected with experienced insurance czars, technology integration into academic trainings, professional certifications and soft skills development which include: Communication skills, negotiation skills, decision making and problem solving skills.
“We need to cooperate with insurance industry and other actors. By making partnership agreement with the industry actors, by organizing special job dating (one -to-one) we can bridge the gap. Moreover, CEOs in the insurance industry can participate in the final oral exams, so that they can identify potential candidates.”
Kandji maintained that building tripartite internship convention with students, companies and schools, could help bridge this gap. She added that Life and none- Life underwriters with students on a day journey with professionals and giving them access to the best database is also a way forward.
“We need to analyze the Fintech technologies and use their tools in our classrooms, teach our students to have a mindset of consuming insurance differently by using data and analysing customer behavior, teach them to be change makers in the industry, be creative and never forget to design our classes to be small incubators for the future of insurance” she implored.