On Sunday thousands of insurance executives and exhibitors from across Southern Africa descended on Sun City in the North West Province for the annual IISA conference. This years’ conference brought high profile speakers from South Africa and abroad. Former cabinet minister, Trevor Manuel and Caroline da Silva were some of the high profile speakers that have captivated thousands of audience when unpacking the social, political and new regulatory challenges faced by the market and South Africa.
The insurance industry was once again under a severe criticism from the national treasury for a slow pace of transformation in terms of race, gender equity and youth empowerment in the country.
Speaking at this year’s the Insurance Institute of South Africa (IISA) annual conference held at Sun City outside Rusternburg, Dr Reshma Sheoraj, director of insurance in the financial sector policy unit at the National Treasury said transformation is at the heart of South Africa and is the tool to address the injustices of the past. She told delegates that inequality in the country is linked to race and gender.
“The pace of transformation has been very slow and not reflective of the reality of South Africa. We are yet to see concrete plan from the industry to address these issues.” She warned the industry saying that the time for talking was over and the treasury will take tougher steps to enforce transformation within the insurance industry and she also called on the boards of all the insurance companies to work with the treasury to address all social and economic issues.
Sheoraj said insurance could play a fundamental role in the economy and is an important pillar of the financial sector in South Africa. She expressed concerns in lack of business diversity and inclusion and pointed out that there’s a protection gap in the insurance market to address the needs of the low income earners and small businesses such as small farm holders. also appealed to the industry to partner with government to address the challenges of a climate change, especially in the field of agriculture.
Former Minister of Finance and Chairman of the National Planning Commission, Trevor Manuel told delegates that drafting the National Development Plan, a detailed blueprint for how the country can eliminate poverty and reduce inequality by the year 2030, it was a massive risk because no one knew what would come out of the planning commission including the president. Manuel emphasized that there was a need for such initiative to be undertaken based on the country’s constitution. He said the NDP is the cornerstone to redress the justice imbalances of the past in the country. “The financial sector is the lifeblood of our plan.”
Manuel also called on the insurance companies to get more involved in transformation, nation building and as well as fighting the impact of climate change.
“We need an industry that recognises the importance of ensuring that every vehicle on the road is insured and create a country that is progressive.”
He said the industry has a lot to do to catch up and position itself differently and in a way that it would be able to respond to the challenges of climate change and emerging risks like cyber. “The country is large and competitive enough to lead by example.” He took a swipe at companies saying they are not educating their staff about important things. “This industry can do better if it encourages innovation among its staff.” Without mentioning the name, Manuel praised Discovery Insure for being one of the first companies in the world to adopt Telematics technology for motor insurance.
Nomfanelo Magwentshu from Mckinseys SA outlined a report she wrote and it was previously presented before the Cabinet outlining five sectors that government could focus on to accelerate economic growth in South Africa. On top of her list tabled before the parliamentary economic development cluster, is advanced manufacturing. In the report, Magwentshu envisage that by the year 2030, manufacturing could contribute R540 billion in GDP per year, increase income scale and build skilled base. Her projection on infrastructure gains, she indicated that the industry could add up to R250 billion a year to the GDP and create around 660,000 new jobs. She said the financial services earnings in the Sub-Saharan Africa are expected to continue to rise. “This is an opportunity for the insurance industry distribute their insurance products.”
Magwentshu said if the country could unlock the value chain of agriculture could increase the economy by R160 billion a year and create 490,000 jobs. She advised for the country to achieve all of these will have to prioritise projects pipeline, build capability and effective tendering system. The country need to shift to a vocational training model in order to equip the people for the jobs of the future. She said this intervention has a potential to transform the South African economy and add R1 trillion to the GDP and in the same time create 2,4 million jobs by 2020.
Caroline da Silva, DEO at FAIS gave an update on the regulatory landscape in the country and how regulators are faced with the challenges to respond to the economic trends. “The regulator is focusing on business unusual. “The world is very interconnected and the market is interconnected.”
She emphasized that regulators have to be proactive and pre-emptive, outcome focused and get too close to the business to understand its risk in the market and also take account of the consumer trends, technology and as well as the socio-economic and political inclusion. “Consumer trends goes into the heart of what the FSB is doing and our objective is to ensure that this industry is sustainable and treat customers fairly because the industry that customers have a confidence in is the industry that grow and the industry that consumers have no confidence in and don’t trust, is the industry that shrink.” She said is important that consumers get fair and affordable advices. In response to the recent protest by the metered taxi drivers against Uber, Da Silva said the regulator can’t put someone out of business because they’re innovative. “Regulators also look at these business unusual when passing regulations.”
Nicholas Kruger, CEO of MMI Holding spoke about the impact of technology, the challenges, threats and as well as opportunities.
He spoke about wearable devices, telematics Big Data and the driverless car and their implications for the insurance industry. It is predicted that by 2020 many of the mainstream car manufacturers will manufacture driverless cars.
Kruger told audience about the Internet of Things and is predicted that by 2020 there will 100 million of these devices interacting to each other. These devices will track your buying pattern and could predict the right product for you.
He said this innovation change client expectation and in the future the insurance will look into personalised solution than general solution. Kruger called on the industry to convert all these challenges into opportunities and to embrace these changes or innovation and integrate them into their business plans.
HUAWEI GAVE US THE NEW P9 TO TAKE PICTURES OVER THE TWO DAYS:
HUAWEI GAVE US THE NEW P9 TO TAKE PICTURES OVER THE TWO DAYS