By: Tebogo Mokwena
Although the insurance sector is rapidly growing, the challenges small insurance companies face need to be addressed for equal growth of the sector, according to the Insurance Sector Education and Training Authority’s (INSETA) stakeholder relations manager Saloshnee Govender. The barriers to entry for small insurance companies included legislative and regulatory changes, developments in technology, changes in the competitor environment and new market opportunities. In a wide-ranging interview on challenges in the insurance sector, Govender said that cyber security remained a major concern, and would receive special focus over the next two to three years.
Hackers often target insurance companies as they deal with loads of sensitive information. “Not just financial but also personal, property and health records can often be intermingled in an insurer’s data logs,” Govender said. Besides ensuring that firms had the right tech in place to deal with attacks, technological advances were also important, especially for emerging businesses looking to penetrate the market but did not have a well-established distribution network. Govender said that the impact of mobile phones and the development of applications for these devices had allowed many companies to reach a bigger audience than was previously possible. “Mobile networks that allow short messages and prepaid mobile phones, as well as large data transfers, would be necessary,” she said.
Govender said that INSETA continued to work with SMMEs in the insurance sector on various programmes. One of its most recent projects, the Small Business Entrepreneurship Programme, saw its first cohort of SMME graduates from the University of Johannesburg Business School. The purpose of this programme, she said, was to provide students with the knowledge and skills to effectively manage their brokerages. It also served to develop business plans and to implement and create viable business ventures that would enable the students to become active participants in the economy.
INSETA has also partnered with FinTech Startup Accelerator for a 16-week programme which started in December to build high-impact fintech start-ups. “We cannot deny that there is still a gap in the market where billions of people still do not understand what is going on with this fast technology that is taking place, which includes the township and rural economy,” she said. “Research is underpinned by everything that INSETA does for the sector.”INSETA has a research chair that advises it on the challenges faced by small and medium enterprises, and it also provides leadership bursaries as well as training and skills development for SMEs.