CEO to CEO: Addressing the re/insurance skills shortage in SA

As a South African CEO navigating these difficult times, I wanted to reach out to other CEOs and share personal insights around this issue in the hope it might resonate and open up dialogue around the challenges we're all currently facing. 

Where are all the skilled brokers?

When we launched Reinsurance Solutions Intermediary Services in South Africa in 2020, it was with a handpicked team of professionals that we knew would excel. They were all highly skilled in their respective fields, and brought a wealth of experience to their new roles.

Now, as the time has come for us to spread our wings and grow our business, both here at home and within the broader region, it has become apparent that this same level of skills proficiency is not readily available in our industry.

In fact, it appears we have a serious re/insurance broker skills shortage in Southern Africa.

My professional observation is that our existing broker talent pool is too small and lacks diversity, and there is no new talent rising through the ranks.

In 2019, the Insurance Sector Education & Training Association (Inseta) released a report following a comprehensive study of the South African short-term insurance sector, specifically the status of skills in the industry.

Following 22 face-to-face interviews with HR directors from leading industry brokers, short-term insurers, underwriting managers and reinsurers, and 70 structured telephonic interviews with medium-sized companies with 50 or more employees, the report noted there a shortage of strategists, specialised skills and underwriters in the medium-sized firms. Actuarial skills, sales and distribution, and IT skills were also areas of concern.

South Africa is not alone in this problem. Just a quick glance through research from PwC, Deloitte and ResearchGate reveals the insurance industry's so-called 'talent gap', 'talent crunch' and 'talent crisis' is a global challenge.

But Southern Africa has a young, eager to work population, so where are we going wrong?

Not enough transformation

The lack of transformation in this sector is evident. According to the Inseta report, '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, playing either specialist or management roles'.

The report goes on to say that the insurance industry is not perceived as an actual career path, in part because of the historical commission-based remuneration structure, and is rather a sector that people end up working in by default. The result is a small pool - and incoming stream - of talent, which is naturally slowing the rate of transformation.

Further, the report noted that medium-sized companies were more inclined to agree with general concerns regarding the transformation process than small and larger companies.

'This suggests that companies with fewer than 50 or more than 100 employees are less affected by transformation challenges than are companies with 50-100 employees. Small companies are mostly dependent on skill sets derived from two or three key individuals and there is seldom a middle management structure. Transformation in these small companies is mostly at an admin level and career advancement has a ceiling with employees forced to move into a larger company to enhance or progress their career,' the report stated.

This tells us that in addition to the challenge of new talent coming into our sector, we are all fighting over the same available talent, or losing them to different industries entirely where there is a perception of better prospects.

Head hunting or poaching staff from each other and other industries is not a solution, and in fact exacerbates the skills shortage.

A specific set of skills

Although brokers need good technical skills and sound product knowledge, there are a number of soft qualities that are vital to this role as well. Brokers must be likeable, outgoing, interesting, smart, able to work under pressure, resilient and thick skinned.

This might be a unique skill set, but it's not an impossible one, and with more awareness around career paths in re/insurance, we should not have any problem attracting high calibre talent to our sector.

Learnerships have a key role to play here. We as employers need to implement learnerships in our businesses, actively promote them, and fill these positions year on year as we train up the next generation of brokers.

We need to identify those areas where candidates are battling and mentor them. So many organisations sit with a wealth of experience within their ranks, but never unlock this and ensure that it is shared with younger employees.

Yes, our industry is changing and technology such as AI is presenting interesting alternatives to the way we do business, but this is never going to replace human brokers. Older, more experienced staff still have the opportunity to help school newcomers, no matter how tech savvy younger employees might be.

We also need to plot out defined career paths to make it easier for candidates to see the potential trajectory of their careers and their futures within this sector - and demonstrate just how exciting those paths can be.

As much as we want to retain all our top talent in Southern Africa, a career in re/insurance opens global doors. This is an attractive carrot to tangle for ambitious candidates who want to ultimately pursue an international career.

Finally, we as CEOs need to work together to increase awareness of re/insurance as an industry with good future prospects; to share knowledge and experience with each other of growing and retaining talent; and to proactively work towards transformation.

Work smarter, not harder at attracting talent

In its insights piece, Insurers can win the war for talent-if they tell their story, PwC argues that recent changes in what workers expect of employers and the nature of work itself both offer insurers a chance to level the playing field.

'Insurers are in an excellent position to come out ahead if they clearly prioritise their needs and effectively communicate to job seekers and employees the industry's many selling points.

'The challenge is overcoming an industry culture that focuses on the past more than the future and tends to work behind the scenes rather than draw attention to itself.

'Insurers have a compelling story to tell. If they open up and start promoting themselves and the industry, they'll put themselves in a strong position for growth, led and supported by intelligent and capable people.'

I believe this is exactly the thinking that is called for now.