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TABLE OF CONTENTS
1
TABLE OF CONTENTS __________________________________________________ 2
LIST OF TABLES ______________________________________________________ 6
LIST OF FIGURES ______________________________________________________ 8
ACRONYMS AND ABBREVIATIONS _______________________________________ 9
ACKNOWLEDGEMENTS _______________________________________________ 12
FOREWORD _________________________________________________________ 13
SYNOPSIS ___________________________________________________________ 14
CHAPTER 1 __________________________________________________________ 28
The INSETA and its Skills Plan for the Insurance Sector _____________________ 28
1.1
Introduction ________________________________________________________ 28
1.2
The INSETA Sector Skills Plan Development Process _____________________ 28
1.3
Skills Levies and Grants ______________________________________________ 28
1.3.1 Mandatory Grants and the Skills Development Levies ______________________________________
1.3.2 Discretionary Grants _______________________________________________________________
1.3.2.1 The Inseta Projects _______________________________________________________________
1.3.2.2 The Introduction of Pivotal Grants into the Insurance Sector _______________________________
1.4
1.4.1
29
30
30
30
Plans for Skilling the Insurance Sector under the New Quality Assurance Framework
31
New Education Training and Quality Assurance Landscape, and Partnerships ________________ 31
1.5
Sector Profile _______________________________________________________ 32
1.6
The Insurance Subsectors and Employers in the Sector ___________________ 43
1.7
Employee Provincial Spread __________________________________________ 44
1.8
Racial Breakdown in the Sector ________________________________________ 46
1.9
Occupational Class by Age____________________________________________ 47
1.10
Distribution of Employees by Gender and Disability _______________________ 49
1.11
Professionalisation of the Insurance and Related-Services Sector ___________ 52
1.12
Concluding Remarks _________________________________________________ 59
CHAPTER 2 __________________________________________________________ 62
SECTOR SKILLS PLAN 2014
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Page 2
Formatted: Font: 6 pt, Bold
Economic Outlook, Performance, and Drivers of Change ____________________ 62
2.1
Introduction ________________________________________________________ 62
2.2
Impact of Structural Changes on Sector Skills Needs within the Insurance Sector62
2.3
Global Insurance: Vast Potential _______________________________________ 63
2.4
Employment in South Africa ___________________________________________ 64
2.5
Macro-Economic Outlook _____________________________________________ 64
2.6
Strengths, Weaknesses, Opportunities, and Threats and Risk Analysis ______ 67
2.7
Market Segmentation_________________________________________________ 68
2.8
Subsectors of the Insurance and Related-Services Industry ________________ 68
2.8.1
Short-Term Insurance ____________________________________________________________
2.8.2
Long-Term Insurance ____________________________________________________________
2.8.3
Health Care Benefits ____________________________________________________________
2.8.4
Retirement Funds and Pension Funds _______________________________________________
2.8.5
Investment and Unit Trusts ________________________________________________________
2.8.6
Funeral Insurance_______________________________________________________________
2.8.7
Reinsurance and Alternate Risk Transfer _____________________________________________
2.8.8
Risk Management_______________________________________________________________
2.8.9 Regulation _______________________________________________________________________
2.8.10 Social Media and Technology _______________________________________________________
69
71
74
75
76
76
77
77
78
79
2.10 Drivers of Change Towards 2020 _________________________________________ 80
2.10.1Regulation_______________________________________________________________________
2.10.2 Changes in the Insurers’ Business Models _____________________________________________
2.10.3 Intermediaries Shake-up ___________________________________________________________
2.10.4 Increased Focus on the Consumer ___________________________________________________
2.10.5 More and New Entrants ____________________________________________________________
2.10.6 Claims _________________________________________________________________________
80
80
80
80
81
81
2.11 Non-Sector-Specific Drivers of Change ____________________________________ 81
2.11.1 HIV/AIDS _______________________________________________________________________ 81
2.11.2 Longevity _______________________________________________________________________ 82
2.11.3 Unemployment___________________________________________________________________ 84
2.12 Sector-Specific Drivers of Change ________________________________________ 84
2.12.1 Customer Behaviour ______________________________________________________________
2.12.2 Micro-Insurance __________________________________________________________________
2.12.3 Motor Insurance __________________________________________________________________
2.12.4 Presidential Infrastructure Plan ______________________________________________________
84
84
87
88
2.13 Concluding Remarks ___________________________________________________ 88
CHAPTER 3 __________________________________________________________ 90
Skills Supply and Demand in the Insurance and Related-Services Industry _____ 90
3.1
Introduction ________________________________________________________ 90
3.2
The INSETA Sector Skills Plan Research Methods ________________________ 90
3.3
The Supply of Skills __________________________________________________ 91
3.3.1
3.3.2
3.3.3
3.3.4
3.4
3.4.1
3.4.2
3.4.3
Supply of Skills from Secondary Schools, and Further Education and Training Institutions _______ 92
Supply of Skills from Tertiary Institutions _____________________________________________ 95
Supply of Skills from the INSETA Education Training and Quality Assurance _________________ 97
Training Interventions for the Supply of Skills into the Insurance Sector and its Impact _________ 101
The Demand for Skills _______________________________________________ 103
Demand for Skills According to PricewaterhouseCoopers and the INSETA __________________ 104
Industry Analysis ______________________________________________________________ 107
Skill Shortages pointed out in the 2012 INSETA PESTEL Report _________________________ 107
3.5
Supply and Demand Dynamics for Specific Occupational Fields ___________ 108
3.6
Concluding Remarks ________________________________________________ 114
CHAPTER 4 _________________________________________________________ 118
Scarce and Critical Skills ______________________________________________ 118
Page 3
4.1
Introduction _______________________________________________________ 118
4.2
Scarce and Critical Skills Reported in the Insurance Sector _______________ 119
4.2.1The Management Category _________________________________________________________
4.2.2 The Sales Workers Category ________________________________________________________
4.2.3 The Clerical and Admin Workers Category _____________________________________________
4.2.4 Summary of Scarce and Critical Skills Reported _________________________________________
4.3
4.3.1
4.3.2
4.4
128
130
130
131
Critical Skills ______________________________________________________ 132
Top Prioritised Critical Skills ______________________________________________________ 132
Critical Skills Emerging from the 2020 Landscape _____________________________________ 132
CHAPTER 5 _________________________________________________________ 137
Strategic Development _______________________________________________ 137
5.1
Relevance of National Development Plans, Policy Documents and Government Priorities
for INSETA’s Sector Skills Plan ______________________________________________ 137
5.2
Sector skills plan objectives determine programmes in the Inseta strategic plan139
5.2.1
Strategic Goal 1: A Credible Institutional Mechanism for Skills Planning (NSDS III 4.1) Performance
Indicators and Targets _________________________________________________________________ 144
5.2.2
Strategic Goal 2: Access to Occupationally Directed Programmes (NSDS III 4.2) Performance
5.3
SSP objectives and Inseta’s indicative budget __________________________ 151
5.3.1
Strategic Goal 3: Better Use of Workplace-Based Skills Development (NSDS III 4.5) Performance
5.3.2
Strategic Goal 4: Training and Support Provided to Sector Co-operatives, Small Enterprises and NonGovernmental Organisations (NSDS III 4.6) Performance Indicators and Targets ____________________ 152
5.3.3
Strategic Goal 5: Building Career and Vocational Guidance – Performance Indicators and Targets 155
5.3.4
Strategic Goal 6: Organisational Effectiveness – Performance Indicators and Targets _________ 158
5.4
Conclusions _______________________________________________________ 158
CHAPTER 6 _________________________________________________________ 159
Implementation Plan _________________________________________________ 159
6.1
6.1.1
6.1.2
6.1.3
6.2
Memoranda of Understanding Reflecting Partnerships ___________________ 159
The Following Memoranda of Understanding are concluded or are Still under Negotiation ______ 160
Impact of actors from other Setas bearing on Inseta strategic objectives ____________________ 161
Strategic Partnerships within the Insurance Sector ____________________________________ 162
Impact of the INSETA Sector Skills Plan on the Direction of the Strategic Plan 2013-2016
162
6.3
Operationally Achieved Credible Institutional Mechanism: Skills Planning in the
Insurance Sector __________________________________________________________ 162
6.4
Strategic Goal 1: A Credible Institutional Mechanism for Skills Planning (NSDS III 4.1)
Performance Indicators and Targets _________________________________________ 164
6.4.1
6.5
6.5.1
6.5.2
6.5.3
6.5.4
6.6
6.6.1
Resource Consideration: ________________________________________________________ 165
Strategic Goal 2: Increased Access to Occupationally directed Programmes _ 165
Articulation of the wealth management career pathway _________________________________
Partnerships with universities TVET colleges to provide bursaries in scarce and critical skills ____
Key Developmental and Transformation imperatives ___________________________________
Resource Considerations ________________________________________________________
167
168
168
168
Strategic Goal 3: Encouraging Better Use of Workplace-Based Skills Development
169
Resource Considerations ________________________________________________________ 170
6.7
Strategic Goal 4: Encouraging and Supporting Co-operatives, Enterprises, WorkerInitiated, Non-Governmental and Community Training Initiatives _________________ 170
6.7.1
6.8
6.8.1
6.9
Resource Consideration _________________________________________________________ 171
Strategic Goal 5: Building Career and Vocational Guidance _______________ 172
Resource Consideration _________________________________________________________ 173
Strategic Goal 6: Organisation Effectiveness ____________________________ 173
Page 4
6.9.1
6.9.2
6.10
Justification: __________________________________________________________________ 174
Executive Office – Resource Considerations _________________________________________ 175
Recent and Forthcoming Projects: 2012-2015 Outline of INSETA Project Plan 175
6.10.1
6.10.2
6.10.3
6.10.4
6.10.5
6.10.6
6.10.7
6.10.8
6.10.9
6.10.10
6.10.11
6.10.12
6.10.13
Impact studies to address skills needs ______________________________________________
Skills Programmes for Workers 2014 _______________________________________________
Skills Programmes for small businesses and cooperatives (burial societies) nationally _________
Skills programmes for unemployed youth ____________________________________________
Human Capital Research Project for the Short-Term Insurance Industry ____________________
Actuaries Development Project 2014 _______________________________________________
Learnerships 2014 _____________________________________________________________
Internships 2014 _______________________________________________________________
Bursaries for workers in 2014 _____________________________________________________
Broker Development Programme ________________________________________________
Bursaries for youth not in employment ____________________________________________
Quality Learning Capacitation Project _____________________________________________
The SME Training Vouchers Project ______________________________________________
175
177
178
178
179
180
181
181
182
182
183
183
184
6.11
How does INSETA achieve the priorities of relevant pieces of legislation with respect to
transformation? ___________________________________________________________ 184
6.12
An Overview with respect to Partnerships with Public Further Education & Training
Colleges as discussed in Chapters 5 & 6 ______________________________________ 185
6.13
Pivotal Programmes linked to the National Qualifications Framework _______ 186
6.14
188
6.15
Conclusions _______________________________________________________ 188
LIST OF REFERENCES _______________________________________________ 189
ANNEXURE B: DEMAND FOR SKILLS 2014 – 2017 ________________________ 194
Demand for Skills 2014 _____________________________________________________ 194
ANNEXURE C: THE RELATIONSHIP BETWEEN NEED ESTABLISHED, STRATEGIES
IDENTIFIED AND ALIGNMENT TO NATIONAL SKILLS DEVELOPMENT STRATEGY GOALS
AND PRINCIPLES ____________________________________________________ 206
Page 5
LIST OF TABLES
Table 1-1: Medium and large company employees in the insurance sector between 2012 and 2013 .......................33
Table 1-2: Medium and large company employees in the insurance sector between 2013 and 2014 .......................33
Table 1-4: Medium and large company, and small company change in employees in the insurance sector in 2013 36
Table 1-5: Employment category versus race comparison for 2012-2013 medium and large companies present in
both the 2012 and 2013 WSP database (1-1a) ...........................................................................................................37
Table 1-6: Small company employees in the insurance and related-services sector between 2012 and 2013 .........40
Table 1-7: List of levy and non-levy payers registered with the INSETA between 2010 and 2013 ............................41
Table 1-8: Small, medium and large levy and non-levy-paying organisations (employers) in the insurance and
related-services sector between 2010 and 2013 .........................................................................................................42
Table 1-9: Number of employees within small, medium, and large registered levy-paying organisations sampled
between 2010 and 2013 ..............................................................................................................................................42
Table 1-10: Employee spread (percentage) over the nine provinces between 2011 and 2013..................................44
Table 1-11: Employee spread (numbers) over the nine provinces 2012 – 2013 ........................................................44
Table 1-12 Employee spread over the 9 provinces in 2014 ........................................................................................44
Table 1-13: Branches and employees reflecting the provincial spread.......................................................................45
Table 1-14: Training across provinces and employment categories ...........................................................................45
Table 1-15: Racial breakdown in the managers and professionals occupational categories .....................................46
Table 1-16: Employment category versus age comparison for 2012-2013 medium and large companies present in
both the 2012 and 2013 WSP database......................................................................................................................48
Table 1-1-17: Distribution of male and female employees in medium and large levy-paying companies ..................49
Table 1-18 Distribution of male and female employees within small levy paying companies ....................................50
Table 1-19: Gender analysis for 2012-2013 medium and large companies present in both the 2012 and 2013 WSP
database ......................................................................................................................................................................51
Table 1-20: Business priorities for 2012 and 2013 ......................................................................................................53
Table 1-21: Impact of legislation on your business .....................................................................................................54
Table 1-22: Medium & Large Companies ....................................................................................................................55
Table 1-22: Small companies ......................................................................................................................................55
Table 1-23: Organisational statistics from employers .................................................................................................56
Table 1-24: Turnover statistics broken down by standard industrial classification codes ...........................................57
Table 1-24 (cont.): Turnover statistics broken down by standard industrial classification codes................................58
Table 2-1: Biggest drivers of revenue growth for the next one to three years (starting at 2012) ................................66
Table 2-2: Strengths, weaknesses, opportunities and threats analysis of the insurance sector.................................67
Table 2-3: Challenges preventing the adoption of a formal risk policy........................................................................68
Table 2-4: Key foci of the enterprise risk management programme ...........................................................................68
Table 2-5: South African insurance market segmentation: percentage share ............................................................68
Table 2-6: Short-term insurance companies ...............................................................................................................69
Table 2-7: Top 10 environmental, social and governance risks ..................................................................................71
Table 2-8: Barriers to growth in the insurance sector..................................................................................................71
Table 2-9: Long-term insurance companies ................................................................................................................73
Table 2-10 Two polar positions ...................................................................................................................................74
Table 2-11: Ability to seize opportunities from regulatory change ..............................................................................78
Table 2-12: Types of regulatory changes impacting business the most .....................................................................78
Table 2-13: Life expectancy in South Africa by age ....................................................................................................83
Table 2-14: Mean values of success influencing factors of business success ...........................................................86
Table 2-15: Causes of road crashes and associated percentages. ............................................................................87
Table 3-1: The number of candidates enrolled for the NSC examination from 2010 to 2012 (part-time and full-time)
per province .................................................................................................................................................................92
Table 3-2: The number of full-time and part-time candidates who enrolled and wrote the 2012 NSC per province in
2012 .............................................................................................................................................................................93
Table 3-3: The INSETA's total submissions to the National Learner Record Database (NLRD) as at August 2013
since the inception of the INSETA ...............................................................................................................................97
Table 3-4: Learnership intake for 2011-2012 ..............................................................................................................98
Table 3-5: Learners in learnerships by province in 2012 ..........................................................................................100
Table 3-6: Comments on the impact of training on the organisation.........................................................................102
Table 3-7: The most popular skills training reported by medium and large companies in the insurance sector (for
2013) ..........................................................................................................................................................................102
2012) ..........................................................................................................................................................................103
Table 3-9: Scarce and critical skills against the OFO codes .....................................................................................105
Table 3-10: April 2011 planned training versus 31 March 2012 actual training completed ......................................109
Table 3-11 Pivotal Planned Trained Beneficiaries 2014 ...........................................................................................109
Table 3-12: 1 April 2012 planned training versus 31 March 2013 actual training completed ...................................111
Table 4-1: Amount allocated to the INSETA’s Scarce and Critical Skills Programme ..............................................119
Table 4-2: The top 10 critical skills demanded for 2014 ............................................................................................120
Table 4-3 Identified Critical Skills 2014-2017 ............................................................................................................120
Page 6
Table 4-4 Top 10 scarce skills for 2014-2015 ...........................................................................................................125
Table 4-7: Top 10 critical skills in the management category ...................................................................................129
Table 4-8: The Top 10 critical skills in the professional category ..............................................................................129
Table 4-9: Top three critical skills in the sales workers category ..............................................................................130
Table 4-10: Top 10 critical skills in the clerical worker category ...............................................................................130
Table 4-11: Critical skills required .............................................................................................................................133
Table 4-12: How many workers are INSETA stakeholders going to train using PIVOTAL programmes for 20132014 and 2014-2015 for large and medium companies ............................................................................................134
Table 4-13: How many workers are INSETA stakeholders going to train using PIVOTAL programmes for 2013-2014
and 2014-2015 for small companies ........................................................................................................................134
Table 5-1: Amount allocated to INSETA Small and Micro-Enterprises .....................................................................153
Table 6-1: Establishing of a credible institutional mechanism for skills planning in the insurance and related-services
sector .........................................................................................................................................................................164
Table 6-2: Increased access to occupationally directed programmes ......................................................................165
Table 6-3: Encouraging better use of workplace-based skills development .............................................................170
Table 6-4: Encouraging and supporting co-operatives, small enterprises, worker initiated NGOs and community
training initiatives .......................................................................................................................................................171
Table 6-5: Building career and vocational guidance .................................................................................................172
Table 6-6: Strategic objectives to achieve Strategic Goal 6 ......................................................................................174
Page 7
LIST OF FIGURES
Figure 1-1: Programmes funded through discretionary grants ....................................................................................30
Figure 1-2: Racial representation in the sector from 2011 to 2013 .............................................................................38
Figure 1-3: Number of employers registered with the INSETA by SIC code for 2013 ................................................43
Figure 1-4: Employee racial breakdown ......................................................................................................................46
Figure 1-5: Racial breakdown in the managers and professionals occupational categories (percentage).................46
Figure 1-6: Age distribution of employees in relation to occupational categories from the registered INSETA small,
medium, and large levy-paying organisations sampled ..............................................................................................47
Figure 1-7: Distribution of males and females in the registered INSETA levy-paying small, medium and large
organisations ...............................................................................................................................................................49
Figure 1-8 Percentage distribution of males and females in large and medium levy-paying companies during 2014
.....................................................................................................................................................................................50
Figure 1-9 Percentage distribution of male & female employees in small levy-paying companies during 2014 ........50
Figure 1-10: Disability by race in medium and large levy-paying employers (%)........................................................51
Figure 1-11: Disability by race in small levy-paying employers (%) ............................................................................52
Figure 1-10: Measuring productivity in the sector .......................................................................................................58
Figure 1-13: Measuring productivity in the sector .......................................................................................................59
Table 2-10 Two polar positions ...................................................................................................................................74
Figure 2-1: HIV mortality rates .....................................................................................................................................82
Figure 3-1: External recruits ........................................................................................................................................97
Figure 3-2: External Black versus White recruits represented ....................................................................................97
Figure 3-3: Learners in learnerships by race in 2012 ................................................................................................100
Figure 3-4: Learners in learnerships by gender for the 2011 to 2012 financial year .................................................101
Figure 3-5: Internship spread per province in 2012...................................................................................................101
Figure 3-6: Educational level by age in 2012 ............................................................................................................114
Figure 5-1: Diagrammatic representation of policies and frameworks in relation to skills development ...................142
Figure 5-2: Percentage of completion and employment for 2012 learnerships.........................................................148
Figure 5-3: Completions and employments statistics for 2010 internships ...............................................................150
Figure 5-4: Completion and employment statistics for 2011 internships ...................................................................150
Page 8
ACRONYMS AND ABBREVIATIONS
Acronym
Description
ABET
Adult Basic Education and Training
ADM
Advanced Diploma in Management
AgriSETA
The Agricultural Sector Education and Training Authority
APP
Annual Performance Plan
ART
Alternative Risk Transfer
ASISA
Association for Savings and Investment of South Africa
ATR
Annual Training Report
BASA
Business and Systems Analysts
B-BBEE
Broad-Based Black Economic Empowerment
BEE
Black Economic Empowerment
BI
Business Information
BMI
Business Monitor International
BTEC
Business and Technology Education Council
CATHSSETA
Culture, Art, Tourism , Hospitality and Sport Sector Education and
Training Authority
CBO
Community-Based Organisation
CEO
Chief Executive Officer
CETA
Construction Education and Training Authority
CHIETA
Chemical Industries Education and Training Authority
CIO
Chief Information Officer
COI
Conflict of Interest
COIDA
Compensation for Occupational Injuries and Diseases Act
CPA
Consumer Protection Act
CPI
Consumer Price Index
DB
Defined Benefit
DC
Defined Contribution
DEA
Department of Environmental Affairs
DEDT
Department of Economic Development and Tourism
DHET
Department of Higher Education and Training
EC
Economic Capital
ERM
Enterprise Risk Management
ESG
Environmental, Social and Governance Risks
ETDP
Education, Training and Development Practices Seta
ETQA
Education Training and Quality Assurance Division
FAIS
Financial and Advisory Intermediary Services Act
FET
Further Education and Training
FIA
Financial Intermediaries Association
FICA
Financial Intelligence Centre Act
FP&M
Fibre Processing and Management
FPI
Financial Planning Institute
FSB
Financial Services Board
FSC
Financial Services Charter
GCSE
General Certificate of Secondary Education
Page 9
Acronym
Description
GDP
Gross domestic product
GET
General Education and Training
GWP
Gross written premium
HESA
Higher Education South Africa
HET
Higher Education and Training
HRD-SA
Human Resource Development Strategy for South Africa
ICT
Information and Communications Technology
IFRS
International Financial Reporting Standards
ISA
Insurance Institute of South Africa
INSETA
Insurance Sector Education and Training Authority
IT
Information Technology
JSE
Johannesburg Stock Exchange
KPI
Key Performance Indicator
LGSETA
Local Government Sector Education and Training Authority Seta
LPE
Levy-Paying Employer
LSM
Live Standards Measurement
MerSETA
Manufacturing, Engineering and Related Services Sector Education and
Training Authority
MI
Micro-Insurance
MICT
Media Information and Communication Technologies
MoU
Memorandum of Understanding
MQA
Mining Qualifications Authority
MTSF
Medium-Term Strategic Framework
NDP
National Development Plan
NGO
Non-Governmental Organisation
NGP
New Growth Path
NHI
National Health Insurance
NLPE
Non-Levy-Paying Employer
NLRD
National Learner Record Database
NQF
National Qualifications Framework
NRF
National Research Foundation
NSC
National Senior Certificate
NSDS
National Skills Development Strategy
NSF
National Skills Fund
NSFAS
National Student Financial Aid Scheme
NSSF
National Social Security Fund
NT
National Treasury
OFO
Organising Framework for Occupations
PFMA
Public Finance Management Act
PIB
Personal Information Bill
PICC
Presidential Infrastructure Co-ordinating Commission
PIVOTAL
Professional, Vocational, Technical and Academic Learning
POA
Principal Officers’ Association
PVNBP
Present Value of New Business Premiums
PWC
PricewaterhouseCoopers
QCTO
Quality Council for Trades and Occupations
QLFS
Quarterly Labour Force Survey
Page 10
Acronym
Description
RDP
Reconstruction Development Programme
RE
Regulatory Exam
ROI
Return on Investment
RPL
Recognition of Prior Learning
SAADP
South African Actuaries Development Programme
SAIA
South African Insurance Association
SAM
Solvency Asset Management
SAQA
South African Qualifications Authority
SARS
South African Receiver of Revenue Service
SASCO
South African Standard Classification of Occupations
SBF
School of Business Finance
SCM
Supply Chain Management
SDA
Skills Development Act
SDLA
Skills Development Levies Act
SETA
Sector Education and Training Authority
SF
Strategic Framework
SIC
Standard Industrial Classification Code
SIP
Strategic Integrated Project
SME
Small and Medium Enterprises
SMME
Small, Medium and Micro-sized Enterprises
SSP
Sector Skills Plan
TCF
Treating Customers Fairly
UNISA
University of South Africa
UWC
University of the Western Cape
VNB
Value of New Business
W&R Seta
Wholesale and Retail Seta
WSP
Workplace Skills Plan
Page 11
ACKNOWLEDGEMENTS
We extend our appreciation to the members of the Skills Division research team for their support of, and
dedication to the development and finalisation of this 2014 Sector Skills Plan (SSP).
Special thank you is due to the Insurance Sector Education and Training Authority (INSETA) sector skills
planning committee members and the INSETA Board sector skills planning task team for their guidance and
support. Further to the INSETA Chief Executive Officer (CEO) - Ms Sandra Dunn, the Chief Operations Officer Ms Sharon Snell, and the management and skills planning division staff for their contributions to the finalisation
of this plan.
In particular, the sector professional bodies and industry associations, such as the South African Insurance
Association (SAIA), the Insurance Institute of South Africa (ISA), the Financial Intermediary Association (FIA),
and the South African Underwriting Association (SAUMA), who provided us with valuable input with respect to
the human capital short-term research project.
We acknowledge with gratitude the information that we have received from the Labour Market Intelligence
Project consortium.
Last, but not least thank you, to the SETA support directorate at the Department of Higher Education and
Training for introducing the concept of Sector Skills Plan cluster meetings.
Yours in skills planning, research and development,
Adeline Singh
Manager: Skills Planning, Research, and Development
Page 12
FOREWORD
It is with pleasure that I present the Insurance Sector Education and Training Authority’s (INSETA’s) Sector
Skills Plan (SSP).
Through the strategic guidance of the INSETA Board, and partnerships with the insurance and related services
sector and government agencies, the INSETA has been able to provide opportunities to thousands of learners in
need and has, at the same time, addressed the requirements as set out in the National Skills Development
Strategy lll (NSDS III). The INSETA is positioning itself to become an authority on labour market analysis in the
Insurance Sector. To achieve this goal, we must develop an SSP with a strong employer-led process and
ownership of the SSP vesting in the insurance and related services sector. The SSP for 2014 has made great
strides towards articulating the collective needs of both levy and non-levy paying institutions. Going forward, we
hope to see the SSP set out an agreed sector strategy to address skills needs. The INSETA, in turn, has a
central role to play in supporting the insurance and related-services sector to meet its needs in terms of skills
development and training.
The INSETA strategy aligns with the government strategic objectives adopted in 2009, as the Medium-Term
Strategic Framework (MTSF), with emphasis on the four strategic priorities, for example, to strengthen the skills
and human resource base. The INSETA has also aligned its strategy with the Department of Higher Education
and Training (DHET) goals and the NSDS lll. All these focus areas are underpinned by a sharp focus on
achieving the fundamental transformational imperatives linked to class, race, gender, age, geography, disability
and the HIV/AIDS pandemic in our society.
We are convinced that the changes that the SETA support directorate are proposing, with respect to the Sector
Skills Plan framework, will, in future, make a value contribution to Sector skills planning.
We have no doubt that this SSP will become the key plan for skills forecasting and development within the
insurance and related services sector.
Yours in skills development,
Sandra Dunn
INSETA CEO
Page 13
SYNOPSIS
Chapter 1 focuses on the relationships between the Insurance Sector Training Authority (INSETA), and its
stakeholder constituency, viz. the insurance sector. This chapter shows that INSETA funds five programmes - youth
development and education, scarce and critical skills, small and micro enterprise, development and research, and
benchmarking - through discretionary grants that we prioritise in terms of the level of funding. . We discuss and
compare the new and old skills levy allocations, and highlight the introduction of pivotal grants and associated
funding to the INSETAINSETA milieu. PIVOTAL refers here to professional, vocational, technical, and academic
learning programmes. The increasing emphasis on the above programmes is a consequence of the bulk of
discretionary grant funding is allocated to these programmes. The central focus of these programmes is on National
Qualification Framework (NQF) registered qualifications that are associated with scare and critical skills within the
Insurance Sector. Examples of pivotal programmes are the Higher Certificate in Short-Term Insurance, and the
Insurance Institute of South Africa (ISA) Programme in Advanced Insurance Practice.
We further highlight developments under the new quality assurance landscape namely,
x
the Education and Quality Assurance (ETQA) Function has shifted towards the Quality Council for Trade &
Occupations (QCTO)
x
our ETQA division has contributed input to developing a national best practice model for quality assuring
occupational qualifications
x
new draft policies are compiled in collaboration with the QCTO – these policies range from skills provider
accreditation policy to external integrated summative assessment policy, and
x
the ETQA is also developing new occupational qualifications in cooperation with the QCTO.
We view the profile of the Insurance Sectors from a number of complex and differentiated variables:
x
x
a comparison of large/medium companies from 2012 and 2013 of occupational categories broken down by race
measured change of number of employees for large, medium and small companies broken down by
occupational group and race during 2013
x
a comparison of the number of employees within identical large/medium employers between 2011 and 2012,
and 2012 and 2013, broken down by occupational group and age
x
x
a measure of racial representation in the insurance sector between 2011-2013 – Black versus White employees
a comparison between the 2012 and 2013 workplace skills plan databases for small employers of the number of
employees broken down by occupational group and race
x
a list of levy and non-levy payers broken down by standard industrial classification (Sic) code between 20102013
x
the number of small, medium and large levy-paying and non-levy paying employers registered with INSETA
between 2010-2013
x
a comparison of the number of employees in small, medium and large registered levy-paying organizations
between 2010-2013
x
the percentage number of employers registered with INSETA by standard industrial classification (Sic) code
during 2013
x
a comparison of percentage provincial employees spread within the following year bands: 2010-2011, 2011 and
2012, and 2012-2013
x
a provincial breakdown of employees by province for 2014
x
branches and employees reflecting provincial spread; occupational categories broken down by provinces
x
a comparison of racial breakdown in the insurance sector between 2011-2013
x
managers and professionals broken down by race, and occupational class by age bands for 2013
x
occupational categories broken down by age bands analysed from identical companies in the 2012 and 2013
databases
x
a comparison of employees broken down by gender for the years 2011, 2012 and 2013
x
race broken down by gender for identical medium and large companies present in the 2012 and 2013 workplace
skills plan databases, and
x
disability broken down by age in medium and large levy-paying companies for 2013.
Page 14
With regard to the legislation and Insurance Sector, business priorities defined in terms of pieces of legislation
ranging from COI to TCF, are numerically ranked - from highest to lowest - from priorities one to three, and is
expressed as percentages.
We break down organisational statistics ranging from retrenched to non-compliance (RE) are by standard
industrial classification (SIC) codes. The corresponding percentages of the total are calculated.
The productivity for companies in the Insurance Sector for 2014 is expressed in terms of a measure of an
increase or decrease in productivity.
In Chapter 2, economic outlook, performance and drivers of change is discussed in relation to both the African
and global markets. The subsectors of the insurance and the related services sector are outlined and included:
x
short-term insurance, where the aspects focus on the incidence of employment within this classification code
x
the impact of brokers and intermediaries, and
x
the incidence (number) of short-term policyholders.
The change in these measures from 2012 to 2015 is further analysed. The success of the short-term industry is
evaluated in terms of gross written premiums expressed in millions of rand value for the period 2010 to 2012.
The measure of insurance impact is further expressed in terms of three key ratios - claims ratio, acquisitions cost
ratio, and expense ratio. Another measure is the underwriting margin.
One area of short-term insurance is motor insurance where it is highlighted that a minority of vehicles are
insured in the South African context, and that South Africans pay the highest insurance premiums in the world.
Proposed interventions include making road safety education a component of the school curriculum to using
outsurance points men.
We identified the environmental, social and governance (ESG) risks that affect the short-term insurance industry.
In addition, we further identified the barriers to growth in this industry.
Various factors reflect the measured growth of the long-term insurance industry and include the following:
x
an increase in the number of branches and growth in the number of brokers and intermediaries
x
Group International Financial Reporting Standards earnings
x
group return on average equity
x
group embedded value profits
value of new business written and the margins on new business for Group International Financial Reporting
Standards earnings for 2010 to 2012, are total comprehensive income and return on average equity.
The performance of the long term insurance business, 2010 to 2012, is measured by the present value of new
business premiums (PVNBP), embedded value of new business (VNB), value of new business margin, and
average payback period.
We discuss various aspects of insurance financial reporting. The Pillar III reporting uses regulatory data to report
on performance. There are divergent views on the exclusive use of the Solvency Asset Management model, viz.
some insurers only use this model while other insurers use their own capital market economic model.
Pillar III reporting is concerned with detailed insurers’ risk profiles and placing them in the public domain. We
highlight that solvency asset management links performance, capital, and risk metrics. You can use two
alternative approaches, or a hybrid view, to complement solvency asset management. This involves either
developing an alternative capital and risk framework, or using local regulatory approaches to address capital and
risk, or a combination of these two approaches. Both these approaches have two separate sets of questions that
we need address. The first; approach raises questions that focus on aspects such as solvency asset
management data being a binding constraint alongside other regulatory, or rating views to the type of metrics
that will be used to assess capital and performance. Developing local regulatory approaches for addressing
Page 15
capital and risk has its own unique set of questions, namely ensuring that the group is guided in a consistent
way to what do you use the internal model for.
We show that the key focal points for solvency asset management range from public disclosure and financial
stability to the effect of reporting on equity. This introduces the following key performance objectives revolving
around either solvency asset numbers driving capital or governing by compliance issues. Furthermore, a more
coherent approach is required with the internal model without regulators having to question the use test.
Another subsector of insurance is healthcare benefits – here the focus is increasing on national health insurance
with the principle of social solidarity, where the objective is to extend social health reforms to everyone within the
South African population. The polemic is that contributors to private health schemes will also have to contribute
to national health insurance. We further identify skills central to health care benefits.
Another subsector of insurance is retirement and pension funds, where we identify the major challenges facing
these funds both locally and internationally. These include the long-term nature of contributions, governance
risks, transparency and disclosure, increased costs and low savings rates. We further highlight the reasons for
premature withdrawal of retirement funds are. In addition, we isolated the critical skills required for the above
funds.
Investment and unit trust is another subsector of insurance. We show how market volatility may affect fund
performance. In this section, we discuss the benefits of collective investment schemes as opposed to individual
schemes. Three levels of governance have been associated with these funds - limited, middle-range and
advanced. These levels of governance refer to different types and complexities of hierarchies for managing
these funds.
We discuss intermediaries, another subcategory of insurance, and highlight the primary organisation associated
with intermediaries – the Financial Intermediary Association of Southern Africa.is Financial intermediaries deal
with various categories of insurance ranging from short-term insurance to investments. We emphasise is that the
FIA consists of various categories of membership. The FIA also interacts with various other professional
associations. The role of the intermediary essentially involves bringing the buyer of financial products into
contact with the provider of financial products in order to conclude a sale. In addition, we identify critical skills
associated with intermediaries.
Another subcategory of insurance that is discussed in chapter 2 is funeral insurance, which refers to assistance
business that includes both support to family and education. This subcategory of insurance has become more
competitive and experienced much change. There is ambiguity about what constitutes funeral insurance, viz.
“Does it include only the amount indicated under death benefits, or does it include an amount in excess of this?”
We identify the skills for the above subcategory.
Under the subcategory reinsurance and alternative risk transfer, we show is that reinsurance is a mechanism for
managing risk where a reinsurance agreement is concluded. It outlines when the reinsurer will pay the insurers’
losses. The insurer pays a premium to the reinsurer. South Africa offers a favourable milieu for reinsurance,
because rate changes are advantageous to the international level. With respect to solvency asset management,
South African insurance companies are developing their own internal models, in terms of this former legislation.
The subcategory risk management refers to risk management of companies. The application of risk
management procedures involves counter party risks and getting to know your client principles. Account needs
are taken from the external environment for managing risk and the recovering global economy.
Skills development training is directed to risk management, risk management function development, and training
to the induction and training of directors.
Chapter 2 further discusses sector-specific and non-sector specific drivers of change. Sector-specific drivers of
change extend from regulation to claims. These are discussed using a predictive element and extend to 2020.
Page 16
We discuss sector-specific drivers of change in relation to both the short and long-term industry. Other sectorspecific drivers of change range from capital requirements to mobile-based technology or social media.
Customer behaviour is another sector-specific driver of change. We further explain the meaning of non-sector
specific drivers of change is that range from HIV Aids to Unemployment.
The polemics of global insurance are further outlined in this chapter. Statistics point to the slowing of the world
economy between 2012 and 2013. Even emerging markets are expected to decline with the exception of Africa,
where markets are expected to grow from 3.7 to 4.2%. It is argued that there are inconsistencies in the global
insurance market due to the financial crisis. A key characteristic is the existence of an anomalous relationship
where there are low interest rates and poor investment returns that retards growth while on the other hand, the
demand for insurance products and services remains high.
Various factors impinge on the global insurance market. We show that risk and global legislation are causing
some insurers to withdraw from core markets and product lines. However, other insurers are using new business
architecture and technology to release better products. It is quite clear that insurers are adopting two types of
behaviour. They either withdraw from specific areas of the global market or use innovative methods to release
new products. The picture of global insurance is changing with a shift in emphasis on customer and distribution
markets and a new focus on emerging markets.
With new regulatory developments such as solvency asset management and solvency II, insurers will have to
adapt their business models to issues such as regulatory balance sheets and reporting requirements. Other
aspects of evolving global insurance picture in relation to the changing industry landscape are the
implementation of flexible portfolios and the distribution of value-adding products. In order for insurance
companies to grow in the changing global market insurer, companies need to focus on variable customer needs,
buyer behaviour patterns and products preferences.
We show that various forces in the external environment compel the South African insurance industry to
innovate from a skills development perspective. These forces range from financial challenges to enterprise risk
management. It is further shown that the finance, insurance, real estate, and business services sector grew at a
higher percentage during the first nine months of 2011 than in 2010.
The chapter also identifies the major drivers of revenue growth with 2012 as the starting point. Factors identified
as contributing to this, are buoyant household consumption expenditure to increased public infrastructure
spending. Other drivers include organic growth, introduction of new products, price increases, acquisition or joint
venture, new distribution channels, etc.
The South African National Treasury has identified the commitments for a global regulatory reform agendaare.
These include a stronger regulatory framework, effective supervision, cris resolution and addressing systemic
institutions and international assessment and peer review.
It is emphasized in the same chapter that the national treasury policy document of 2011 is centred on four key
policy objectives: financial stability, consumer protection, and market conduct, expanding access through
financial inclusion and financial crime, etc.
A strengths, weaknesses, opportunities, and threat analysis of the insurance sector is carried out, and the
results are reflected in this chapter. Strengths range from the industry access to grants to the financial strength
of the distribution channel. Weaknesses range from the knowledge of funding by smaller brokers to poor
infrastructure. Opportunities range from employing people who understand world events that predict the
insurance industry to professionalize the sector, growth in developing markets, and treating customers fairly.
Finally, threats range from the new legislation to national health insurance and retirement reform projects.
Furthermore, under discussion in this chapter are the challenges affecting the adoption of a formal risk policy.
Some of these include culture and behaviour, process integration efficiency of operations, clearly defined roles
and responsibilities, and more. Other aspects focused on, are key foci of the Enterprise Risk Management
Page 17
Programme. These include supporting business decisions, assessment of risk exposures, and improve risk
management processes, etc. Market segmentation is also is also included and it is shown that life insurance has
a greater share of gross premium income than non-life insurance.
The issue of the 2020 landscape – Where from here? - is also addressed. Areas expected to be of significance
are the following: active and informed consumers across demographic groups – the need for consumer
education is further reinforced by the third world understanding of needs and policy benefits as well as the
consumer protection act which specifies the need that consumer education meets the requirements of the act.
Regulatory coordination and use of affirmed industry standards broaden to global scales - where South Africa
has to meet the G-20 requirements of regulation that creates the anomaly that a currently third world country has
to meet the standards of first world nations. Technology virtualizes the value train and lowers barriers to entry –
here technology influences positively on niche service providers from both inside and outside the traditional
value-chain and gives rise to virtual insurance companies. We also look at industry convergence, where some
insurance companies have initiated the step of converging into the banking industry; another related issue is the
effect of mergers and acquisitions on employment, which sometimes leads to the creation of redeployment
centres. Growing middle class, where it is contended that this class can affect positively on the insurance
industry – also the black middle class, should be a major focus of the insurance industry in South Africa because
of the advent of democracy in 1994 – another factor contributing to the development of this class has been Black
Economic Empowerment (BEE). Black middle class – the growing black middle class introduces skills
implications for the insurance industry. This phenomenon will also bring about the need for insurance companies
to create new product offerings for this class.; Regulation, which is identified by senior executives as one of the
most pressing issues confronting them in 2010 – an empirical study is provided and discussed where these
same executives rate their level of ability to seize opportunity from regulatory change. In the same study the type
of regulatory change influencing business the most, is evaluated, examples are solvency modernization
initiatives to convergence of insurance contracts. The publication – a safer financial sector to serve South Africa
better, national treasury highlights the fact that regulation should follow global best practice but at the same time
taking into account the unique conditions of the South African economy, i.e. the need for economic growth and
job creation. It is also shown that regulation involves multiple and diverse pieces of legislation ranging from
solvency asset management to changes to binder regulations.
Treating customers fairly is placed under the 2020 landscape. The emphasis here is on the fair treatment of
customers at all stages of the product life cycle. The five stages ranging from design to after sale are listed.
Interestingly, this initiative, should lead to companies re-evaluating their company culture. We show that the
main objective is to achieve optimal outcomes for regulators, customers, as well as the firms themselves.
What will be the impact of social media and technology on the 2020 landscape? With regard to social media and
technology, these chapters show is that they can be viewed from several perspectives. Social media creates
broader networks linking emerging and developing markets. Another consequence is that data becomes
actionable, because social media and technology lead to diverse and multiple hardware and software
developments. It is argued that it is possible that social networks will become the brokers and insurance agents
of the future. The impact of technology on the 2020 insurance landscape is addressed. It is contended that
technology would influence the above landscape in multiple ways extending from multiple channels of production
to various types of modelling. A study is cited from a 2012 KPMG study depicting digital marketing strategies
planned for 2013. The top four digital marketing strategies include customer facing mobile applications, social
media for external brand promotion, and social media for recruiting and social media for customer insight. The
top four mobile specific enterprise websites are further identified – these are the following mobile intranets,
social media for customer crowd sourcing, mobile-commerce technologies, and social media for enterprise
crowd sourcing. The KPMG insurance 2010 survey shows that the most common technologies or focus areas
range from more use of web technologies to establishment of aggregator services. Other technologies are
identified from the Price Waterhouse Coopers study of 2010and include telephone underwriting and
underwriting, and claims assessment.
Page 18
Another feature looked at in this chapter is the environmental driver which is looked at from the vantage point of
green growth and satisfying the requirements of the national sustainable development framework. Two reasons
are proposed why the environmental driver should be incorporated into all sector skills plans, Firstly, by pursuing
green growth South Africa could benefit from opportunities offered by both global and local green economic
activity. It is also essential that the state implement the national sustainable development framework in order to
ensure that resources reach the most vulnerable members of our South African society.
Micro-insurance is addressed extensively in chapter 2. The objectives of the national treasury policy framework
for micro-insurance are shown to be manifold and include the following: provision of access of insurance
products to low income households, formalize insurance provision by informal providers, lower barriers to entry
among potential service providers of these products, increase business protection through business conduct
regulation, and ensure relevant and sufficient enforcement.
The micro-insurance policy framework obtained from National Treasury in 2011, includes proposals around the
following: levelling the playing fields for providers, product standards and benefit limits, and lower prudential
requirements.
Other features of a sound and adequate micro-insurance policy framework must take cognisance of the
following: applicable intermediary requirements, appropriate consumer awareness and responsibility, and more
effective supervision and enforcement.
It is emphasized that micro-insurance is an offshoot of the Financial Sector Charter (FSC), and Black Economic
Empowerment (BEE), which gave impetus to insurers offering insurance products for the low-income groups.
It is argued that micro-insurance products should have the following salient product features:
x
risk only,
x
benefits provided on a sum assured basis only
x
defined benefit caps
x
maximum contract term
x
non-selective non-renewal within group policies
x
actuarial certification of premium
x
basis of underwriting to be discretionary
x
waiting periods
x
simplifications
x
exclusions
x
right to a monetary benefits, claims payments
x
grace period
x
target market and further product standards.
In the same chapter, extensive reference is made to a conceptual model of factors that measures business
success in the micro-insurance industry. The top four mean factors measuring business success for microinsurance are include trust, physical evidence, financial literacy, and people. However, it is concluded that there
is no factor that satisfactorily measures business success, as all mean scores are below 60% (Chummum, B.,
and Bischoff, 2013). In this chapter, a number of recommendations are formulated for micro-insurers to achieve
business success in the current unsatisfactory environment.
The Presidential Infrastructural Plan is broadly discussed in this chapter, where it is advanced that there are a
number of challenges facing the government ranging from the New Growth Path, which sets out to create 5million jobs by the year 2020 to poor coordination that slows projects and limits their impact.
The mechanism used to achieve this objective of job creation and alleviate the above weaknesses is the above
plan, which is intended to transform the economic landscape of South Africa, strengthen the delivery of basic
services to the people of South Africa, and support the integration of the South African economies. Also
Page 19
highlighted in this chapter, is that 17 Strategic Integrated Projects (SIPs), have been developed and approved to
support economic development and service development in the poorest provinces.
In Chapter 3, Skills Supply and Demand in the Insurance and the Related Services Industry, issues about the
supply of financial advisors is outlined. With respect to the demand for actuaries, there are conflicting views
about this issue. These views are expressed in stakeholder feedback sessions. Other key occupational areas
are discussed further in this chapter. These include external recruits for 2013 broken down by race group as well
as a composite measure of Black versus White external recruits on a percentage basis; the most popular skills
training reported by medium and large companies in the insurance sector for 2012 and 2013; and planned
training versus actual training completed. The research methods used in the development of the current sector
skills plan are discussed in this chapter. The type of labour market information that is yielded from the annual
training report from 2012, and the workplace skills plan of 2013, is also mentioned.
Multiple research methods ranging from desktop empirical studies to stakeholder validation exercises are used
in order to obtain data from the Sector Skills Plan. It is contended that the amount of labour market data
available to the insurance and the related services sector is weak.
Most of the training data available to the insurance and related financial services sector is obtained from the
INSETA Annual Training Report of 2012, and the workplace skills plan of 2013. Information about immediate,
intermediate, and future scarce & critical skills is derived from the annual training report and the workplace skills
plan mentioned above. Other data about the supply of skills comes from employees/learners who qualify with
insurance specific qualifications.
With reference to the supply of skills from secondary schools and further education and training institutions, the
number of learners enrolled on a full and part-time basis per province between 2010 and 2012, is presented
here. In addition, the number of learners who enrolled and wrote the national senior certificate in 2012 is
compared and contrasted. The data trends for both full and part-time learners who enrolled for the National
Senior Certificate during 2010 and 2011 or 2012 for one small provinces and two large provinces, is highlighted.
It is also advanced that the supply of skills from our educational system into the insurance sector is inadequate
especially at the entry-level. This information is derived from the strengths, weaknesses, and opportunities and
threats analyses. Other concerns raised are that many employees exit their employment positions in the
insurance sector without remaining in them for at least a year. This is because of the gap between expectations
and reality.
It is also shown that a new alternative to the South African matric is now available in the South African context.
In this section, supply of skills from tertiary institutions in the same chapter, there has been the development of
new institutional types ranging from universities of technology to comprehensive universities, because of
mergers and incorporations (Cf. to the Green Paper on post-school education and training, 2012). There are
also administrative hubs, which coordinate partnerships with universities elsewhere. The types of qualifications
offered by universities and universities of technology are outlined.
The headcount of learners at the above institutions at both undergraduate and postgraduate level across the
variable of race and the dropout rate is are provided, and dropout
The various types of insurance qualifications, which are offered at post-school tertiary institutions, are
mentioned.
It is argued that there are various factors that causes low throughput rates at the above institutions. Multiple
factors have been isolated as contributing to the above rates. These are the following: inadequate university
funding, students cannot fund their own studies, inadequate resources & infrastructure at black universities, poor
living conditions, lack of student support, poor nutritional value of meals provided, The Department of Higher
Education and Training (2012), is involved in attempts to address the above issues.
Page 20
Under the section research and innovation, is we show that there are outputs that are used to meet the
objectives of the medium term strategic framework (MTSF). Here the focus is on increased research and a
greater emphasis on research development and innovation. This new slant to research involves with new and
varied partners in order to achieve a stable funding model which will ultimately assist with the achieving the
objectives of the national growth path and the industrial policy action plan II. This will assist in advancing
transformational efforts, generate new knowledge, and strengthen our society and economy.
In the section occupationally directed skills supply to the insurance and related services industry, iswe show that
INSETA uses the vehicles of learnerships and internships to assist unemployed persons to obtain industryrelated qualifications and work-based experience. Other measures included here are external representation
among our stakeholders in 2013, broken down by sex and race. Also external Black versus White recruits in
2013.
In the section Supply of Skills from the Education, Training and Quality Assurance (ETQA), INSETA’s total
submissions to the National Learner Record Database (NLRD), as at August 2013, are highlighted. The highest
are number of submissions is in the form of unit standard submissions followed by qualification submissions.
In the section on learnerships, is we show that learnerships are used as a mechanism to address scarce skills,
business needs, and imperatives within the insurance sector. Learnership intake categorized as completed,
registered, or terminated before completion is provided for the years 2011-2012. We further show the distribution
of learners by province for 2012is. In addition, we show statistics on learners on learnerships by race, and
further, statistics is on learnerships by gender for the financial years 2011-2012is.
Statistics on the internship spread per province is depicted.
In the section training interventions for the supply of skills into the insurance sector and its impact, a June 2012
survey highlights the employers’ views on the impact of training on their organization. It is noted that all forms of
training had positive spin-off for their respective organizations. Other measures reported are the following: the
most popular skills priorities reported by medium and large companies broken down by occupational category in
2013, and the most popular skills priorities reported by medium and large companies in 2012.
In the section demand for skills it is shown that, this demand for skills is established from three sources: INSETA
workplace skills plan data, vacancy analysis and industry consultation.
In the section, demand for skills according to Price Waterhouse Coopers, this company rank-ordered a number
of professional executive positions, which are in demand. INSETA compiled a listing of scarce and critical skills
against the organizing framework for occupations for the years 2012-2013. These ranged from director
(enterprise organization)(skill level 5) to telemarketer (skill level 1).
In the section industry analysis in chapter 3, the findings on the skills shortages from the Price Waterhouse
Coopers (2012) study, are compared to the data obtained on the same issue from the 2012 workplace skills
plan/annual training report data.
In section skills shortages, in the 2012 INSETA Pestel Report 3, main areas are identified. These include
stakeholders stated that there is an inadequate supply of skills emanating from the educational system, the
divide between school and university, and the training identified by industry is divided into a number of main
areas extending from mathematical basics of multiplication and division to qualified insurance educational
facilitators.
In the section demand for skills according to recruitment trends in the insurance and related services sector it is
shown that, the insurance, related services and financial services sectors are competing for the same skills.
In the section supply and demand dynamics for specific occupational fields, interplay is on training planned as
opposed to training implemented. Here one measure is used over two different periods - planned training April
2011 versus actual training completed 31st March 2012, broken down by occupational category and planned
Page 21
training April 2012 versus actual training completed 31
st
March 2013 – also broken down by occupational
category.
Finally, another variable looked at, is educational level broken down by age bands ranging from < 34 to 65+.
In Chapter 4, Scarce and Critical skills, it is shown that the data for the analysis of these skills is obtained from
workplace skills plan/annual training report data as well as from surveys of levy-paying insurance companies.
One-on-one meetings are also held with insurance stakeholders in order to confirm findings on the empirical
data on scarce & critical skills obtained from wsp/atr submissions. Employers are given definitions of the
meaning of scarce & critical skills where reference is made to the fact that critical skills have a top-up component
to it. This chapter on scarce and critical skills is drawn from a sample of 155 companies.
The budget allocated to the NSDSIII goal of better use of workplace based skills development and the
associated programme of scarce and critical skills is mentioned. INSETA currently has five projects operating
under the umbrella of scarce & critical skills. An example is the Business & Systems Analyst Project (2012). The
4 occupational areas of scarce and critical skills priorities are the following, professional, management category,
sales worker category, and clerical & admin workers category,
In the section Scarce and Critical Skills reported in the Insurance Sector, reference is made to the Price
Waterhouse Coopers (2012) study, where reference is made to varying single scarce skills (ranked most
important) identified between 2008 and 2012. However, it is noted in the same study that critical skills shortages
are widely distributed across 10 occupational categories.
The demand for critical skills for 2014 is presented in this chapter. The count for each critical skill is presented
together with what percentage it constitutes of the total for each of these skills. Double-digit percentage of
demand for some critical skills is related as more significant, viz. insurance agent and outbound contact centre
agent. These skills are also colour-coded in terms of demand, where red represents immediate demand, green
medium term demand, and yellow longer-term demand. For information on demand for critical skills from 20152017, please refer to the appendix of the Sector Skills Plan.
The top 10 critical skills in the management category for 2014, are sales & marketing manager (skill level 5), and
director (enterprise/organization) (skill level 5). The most critical of skills among the top 10 listed professional
skills are the following: insurance broker, actuary, ICT business analyst, and developer programmer (all at skill
level 5). The top critical skill among the three listed critical skills in the sales worker category is the insurance
agent (skill level 3).
The most critical skills among the grouping of 10 critical skills in the clerical and admin workers category are the
following: outbound contact centre consultant, insurance claims administrator, statistical clerk (all at skills level
2), and insurance loss adjuster (skill level 3). Interestingly, what the percentage distributions of the critical skills
revealed is that for the following organising framework for occupations’ categories, viz. management,
professionals, and clerical and admin workers categories, there is a wide range of critical skills identified with
relatively moderate and low percentage values together with one relatively high percentage value. This indicates
that a number of critical skills have been identified but the demand for them is low. A cut-off approach should be
adopted where only double-digit percentage values in relation to critical skills should be considered to be of
value. It is worth noting that only with respect to the sales workers category, there is only one occupational
category with a double-digit percentage demand, viz. insurance agent
Pie representation of scarce & critical skills in the professional, sales worker and clerical admin workers
categories are presented.
In the section top prioritized critical skills, it is contended that there is an ongoing need for skills training in
legislation. For example, compromising on legislation related to climate change affects the short-term insurance
industry.
Page 22
In a section anticipated critical skills up to 2020, critical skills focus areas identified are the following: green
agenda, the ageing population, regulation, technological, social media, the 2020 landscape and client centricity.
For example, with regard to the ageing population knowledge and skills are required to determine the impact of
ageing on the insurance industry at senior and actuarial levels.
In a section recommended cross cutting programmes critical skills, short courses and pivotal programmes for
skills level 5, are identified. These range from environmental risk and vulnerability assessment, modelling and
mitigation planning to Wetland and riverine rehabilitation worker training for flood damage control and water
security.
In a section titled need for bursaries and pivotal programmes, the Department of Environmental Affairs (2010),
has identified skills shortages in the following areas ranging from Environmental economists and naturalresource economists to Disaster managers with sustainability management skills.
In a section titled planning towards the implementation of scarce and critical skills in pivotal programmes, two
questions are addressed: how many workers are INSETA going to train in large and medium companies using
pivotal programmes during 2013-2014? How many workers are INSETA going to train in small companies using
pivotal programmes during 2013-2014? These two questions are addressed using occupational categories.
Among large and medium companies, the occupational categories, which contained the greater number of
workers who are undergoing pivotal programmes from highest to lowest, are the following: clerical & admin
workers, sales workers, professionals, and technicians and trade workers.
Among small companies, the occupational categories that contained the greater number of workers who are
going to undergo pivotal programmes from highest to lowest are the following: professionals, clerical & admin
workers, sales workers, managers, elementary workers, and machinery operators and drivers.
In chapter 5, strategic development, it is shown that sector skills plan objectives are linked to legislation,
frameworks, and strategy including the skills development act, the national skills development strategy III, and
the human resource development strategy (2010-2030). Other functions of INSETA include:
x
develop a sector skills plan,
x
formulate policies and procedures of the sector education training authority, and promote the national standards,
etc.
It is shown that the sector skills plan is influenced by the strategic framework, the annual performance plan,
strategic goals of the national skills development strategy, national growth path framework, national
development plan, and the human resource development strategy 2010-2030. The above strategies have a
number of strategic goals. It is shown that on a national level, the main objectives of growth and development
strategies are to reduce unemployment, reduce poverty, reduce inequality, and increase social cohesion. The
purpose of the national growth path framework is to create markers for employment creation and growth, and for
a more inclusive and greener economy.
It is emphasized that the national development path focuses on various strategic goals ranging from focusing on
the critical capabilities of people and state to encouraging a strong leadership throughout South Africa to work
together to solve problems. It is further indicated that the human resource development strategy 2010-2030, has
various strategic goals extending from improving national economic growth and development of the economy to
improving justice and social cohesion through increased access to education and skills development
programmes.
The strategic objectives of the national skills development strategy III range from establishing a credible
mechanism for skills planning to building career and vocational guidance.
The national strategies and the impact on the objectives of INSETA are also outlined diagrammatically.
Page 23
In a section annual performance plan the INSETA’s annual performance plan sets out INSETA’s commitments
towards implementing its’ strategic goals which are connected to NSDSIII. It is shown that the purpose of the
annual performance plan is to indicate what INSETA intends to do in the forthcoming financial year and the
medium term strategic framework to implement its plan.
In another section alignment of the strategic plan to INSETA’s sector skills plan, it is contended that the sector
skills plan is connected to the strategic plan, which aims to strengthen the skills and human resource base.
Through the sector skills plan a basis is arrived at, for seeing the current picture of the insurance sector, as well
as the future requirements – a basis is established for the creation of the strategic plan. The sector skills plan
has various strategic aims ranging from formulating strategies for achieving NSDSIII objectives and targets to
formulating strategies for responding to fluctuations in specific industries.
In a section, INSETA’s Skills Development Priorities linked to National Skills Development Strategy III outcomes.
The national skills development III strategy objectives are achieved through four INSETA programmes, viz.
research and benchmarking; youth, education and development; addressing the need for scarce and critical
skills; and small and micro-enterprise development.
The strategic goals of the National Skills Development Strategy III are addressed in chapter 5.
1. A credible institutional mechanism for skills planning (NSDSIII 4.1) - various strategic objectives support
strategic goal 1, ranging from research the sector profile to disseminate research findings to stakeholders.
INSETA’s programme 1, research and benchmarking, informs the needs for credible research that serves as the
basis for input into the sector skills plan, with respect to skills. One project, which was initiated during the 20122013 financial year, was INSETA 2012 sector skills plan project, which responds to INSETA’s mandate to
conduct research on the current and future supply and demand for skills. It is highlighted in the chapter that the
cost of developing a credible institutional mechanism for skill planning will be no more than 10% of discretionary
grant funding. Other envisaged research projects are national health insurance, micro-insurance and regulatory
changes and its impact on the industry.
In relation to strategic goal 2, access to occupationally directed programmes (NSDS 4.2), it is emphasized that
various strategic objectives support this goal varying from supporting youth to obtain scarce and critical skills to
improving access to workplaces. It is also highlighted that various projects are in place to increase access to
occupationally directed occupationally directed programmes. The objectives of these projects include the
acquisition of sought-after work experience, assisting learners to obtain relevant qualifications, securing of
workplace experience for competent learners, funding employers for internships, and addressing key
transformational imperatives. The targets for these various projects are also specified. The vehicles through
which this laudable goal of increased access to occupationally directed programmes are achieved is through
learnerships, internships, FETI-HETI articulation project, and funded projects such as the funding of BCom
students for various insurance-directed studies. Other projects, which are covered, are funded projects for BCom
students that started in 2013. The funding is for a year and the expected date of completion is February 2014.
First-year and second-year students are funded with a co-relationship with the National Student Finance Aid
Scheme (NSFAS). Another project that is discussed is the FETI-HETI projects leads to a qualification in wealth
management at Level 5, with the option of pursuing an advanced Management Diploma.
In a section, 2013 internship and learnership programmes it is highlighted that the impact of these programmes
will be graduates with sought after and specialized qualifications responding to the needs of the industry.
In a section internship programmes, it is shown that the internship projects support graduates and learners with
insurance qualifications, who need to acquire work experience, and learners from public FET colleges doing
business qualifications that require a component of workplace experience to achieve certification. Similarly, in a
section learnership programmes it is highlighted that these programmes respond to the goal to increase access
to occupationally directed programmes by assisting new entrants to qualify into the sector. The impact is that
youth are reached in all nine provinces, including remote areas, where employers can be accessed to host
Page 24
learners for the workplace-learning component. Learners exit with qualifications that are sought-after and
address the skills needs of the industry. The completion and employment statistics for 2012 learnerships are
broken down by number of learners registered, number of learners who terminated before completion, number of
learners who completed the learnership, number of learners who did not get placement, number of learners
placed on completion, and the number of the learners still to complete the learnerships. Similarly, this is also
done for 2010 and 2011 internships according to the following criteria: number of learners registered, number of
learners who terminated before completion, number of learners who completed the internship, number of
learners who did not get placement, and number of learners placed on completion.
In a section titled types of funded projects, INSETA collaborated with the National Student Finance Aid Scheme
of South Africa (NSFAS). In another section, viz. strategic goal 3 better use of workplace-based skills
development (NSDS 4.5), it is shown here that two strategic objectives support the above goal, viz.
Development of quality programmes that address scarce and critical skills for the development of employed
people and increased workplace learning. INSETA’s programme, scarce and critical skills, falls under the above
goal, where the focus is on filling gaps in relation to scarce and critical skills and through impact studies
determining whether the incidence of these skills is increasing or decreasing. INSETA will realize the objectives
of this programme by implementing skills programmes for people with disabilities and empowering Black
managers with industry knowledge and skills. In a section headed resource considerations the following skills
are identified as being critical and need to be prioritized for rollout in to the sector. These range from strategic
and innovative thinking to BEE scorecard and employment equity training.
In a section title strategic goal 4, training and support provided to sector cooperative, micro-cooperatives, and
non-governmental organizations (NSDS 4.6). Here, INSETA will support small, medium, and micro-sized
enterprises and develop a national database of brokers and intermediaries. In a section headed INSETA
programme 4, small and microenterprise development, a project which forms part of the above strategic goal is
the small- and micro-enterprise Training Vouchers Project, which addresses the INSETA’s strategy for small and
micro-enterprise development through providing training and support to sector co-operatives, small enterprises
and NGOs. For resource consideration that fall under the above goal, it is shown that the expenditure of the
strategic goal encouraging and supporting co-operatives, small enterprises, worker-initiated NGOs and
community training initiatives will be targeted at 30% of the annual discretionary grant allocation.
In a section titled partnerships with burial societies/cooperatives skills support programme, it is shown that the
INSETA has to achieve a target of 200 registered co-operatives by the end of the current financial year 31 March
2013. To date, 148 burial societies have undergone training to register as co-operatives. Therefore, the shortfall
for burial societies to register as cooperatives by the end of the current financial year is 52, but there is much
confidence that this target will be achieved by the required date. In the current financial year, 44 burial societies
have registered with the Companies and Intellectual Property Registration Office. Twenty-five of them have
undergone the final training for burial societies who have also registered as co-operatives (Budulwayo, 2012). In
addition, the INSETA is still planning to introduce bookkeeping and secretarial skills training to co-operatives.
In a section strategic goal 5 – building career and vocational guidance it is indicated that Three objectives
support this goal, viz. Develop a career guide; provide career guidance and development to youth both within the
sector and new entrants to the sector for the next five years; and forge partnerships with FET Colleges and
industry bodies. In a section headed INSETA programme 2, youth education and development, it is emphasized
that the practicalities of realising Programme 2 will be manageable through the provision of career guidance and
developmental information, the provision of workplace experience and skills, and working collaboratively with the
DHET and professional bodies.
In a section headed a multifaceted approach to address career and vocational guidance channels it is
highlighted that the INSETA follows this strategy in order to realise career and vocational guidance objectives. In
this regard, the INSETA works closely with SAQA, whose mandate is to bring all SETAs in line with its two-fold
approach for career and vocational guidance. The two components are funding in relation to career and
vocational guidance and their actual standard-sized approach and methodology to career and vocational
guidance.
Page 25
With reference to the career guidance calendar for 2012/2013, it is shown that The INSETA Career Guidance
Calendar reflects the career guidance events, which took place in 2012 and those that occurred during the first
three months of 2013. There are a wide range of differing events that comprise a number of different elements,
viz. science week, career expos and exhibitions, scarce skills expos, career days organised under the auspices
of the churches, anti-poverty day, world of work career fair, career events organised by government departments
and other SETAs, and career events organised by universities. These events occurred in a wide range of
provinces extending from Gauteng to the Western Cape. During 2012, these events took place from April to
November 2012. During 2013, various skills planning, development initiatives commenced, and more details of
these can be found in the INSETA Annual Report, which is available on www.INSETA.org.za.
In a section titled goal 4.8 career paths are mapped to qualifications, it is highlighted that 72 institutions
participated in career guidance during quarter 4. Of the learners, 52.7% came from the rural areas and 42.7%
came from urban areas. All of the learners are South African citizens. The mean age of the learners is 19.07,
and none of these learners are disabled (INSETA Marketing Division, 2012).
In a section headed strategic goal 6, it is indicated that three strategic objectives are supported by the
Organisational Effectiveness Programme viz. maintain effective corporate governance, develop and implement a
quality management system, and establish an effective supply chain management unit.
In chapter 6, the implementation plan it is shown that this incorporates the Insurance Sector Education and
Training Authority’s (INSETA’s) strategic goals (as expressed in the annual performance plan), in order to
ensure alignment to the support of organisational strategy and effectiveness in the implementation of its projects.
Memoranda of Understanding reflecting partnerships where INSETA has concluded agreements with a number
of FET colleges in the North West, Western Cape and KwaZulu-Natal, where the agreements are expressed in
terms of overarching intentions, national medium-term strategic aims and supporting the objectives of the
cluster. Overarching intentions range from joint planning within the skills development framework to the aims of
the national Medium-Term Strategic Framework (MTSF). The aims of the national medium-term strategic
framework range from creating sustainable livelihoods to strengthening democratic institutions. Overarching
intentions can also include education and training needs to experiential workplace learning for students.
In a section titled strategic partnerships within the insurance sector, INSETA has collaborated with various
entities. Short-term insurance subsector has set up a Human Capital committee that has a mandate to drive the
skills agenda of this sector. The INSETA also attends the ASISA Employment Equity and Education committee
meetings where the INSETA is given the opportunity to collaborate with ASISA sector representatives. The
INSETA also allocated a further R 5.9-million to fund a Wealth Management Level 5 Learnership delivered by
five FET colleges in the Western Cape; the INSETA collaborated with FET colleges and universities and
provided bursaries in areas of scarce and critical skills ranging from BCom Financial Planning to National
Certificate Vocational (Financial Management). The allocation amount for these latter bursaries is R14.2-million
(Insurance Sector Education and Training Authority, 2012).
In a section impact on the sector skills plan on the INSETA strategic plan, it is shown that all the strategicoutcome oriented goals, viz. 1. Establishing a credible mechanism for skills planning in the sector; 2. Increased
access to occupationally directed occupationally directed programmes; 3. Encouraging better use of workplace
based skills development; 4. Encouraging and supporting co-operatives, small enterprises, worker-initiated, nongovernmental organisation (NGO) and community training initiatives; and 5. Encouraging and supporting cooperatives, small enterprises, worker-initiated, non-governmental organisation (NGO) and community training
initiatives - all of the above strategic goals have been analysed according to the following criteria: outcomes,
objectives, baseline, indicators, and interventions.
In a section headed forthcoming projects 2013-2014, various conclusions are drawn about the projects
discussed:
x
the business and system analyst programme has dual needs, viz. to increase the number of business and system
analysts and to increase the number of jobs and revenue;
Page 26
x
the purpose of the quality learning capacitation project is to capacitate training providers with the new quality council
for trade and occupation quality assurance framework;
x
the year 13 pilot underwriting learnership arose because of the critical shortage of underwriting skills;
x
the year 13, learnership project is to assist 5000 youth to gain entry into the learnership sector.
Page 27
CHAPTER 1
The INSETA and its Skills Plan for the Insurance Sector
1.1
Introduction
Chapter 1 covers the relationship between the
(INSETA), government and the insurance sector
related-services sector. A number of broad-based
areas
are
covered.
Highlights
include
the
following:
-
The purpose and focus of the INSETA Sector s
Skills
Plan (SSP), is addressed.
-
A comparative analysis between the former and
new
percentages is presented.
-
Mandatory and discretionary grants are discussed.
A detailed profile of the sector by occupational category is presented including small, medium and large
company employees, racial representation in the sector, levy and non-levy payers registered with the INSETA;
distribution of employees by gender, occupational class by age, and productivity in the sector.
1.2
The INSETA Sector Skills Plan Development Process
The INSETA SSP identifies the skills needs of the insurance sector and reports on training planned by the
sector. It also examines the concepts of employment, skills, and qualifications from a broader perspective. The
plan serves to identify the industry dynamics that drive the sector.
The SSP provides an essential background for the contextualisation of the INSETA Strategic Plan. It enables a
response in the form of a strategic framework that is realistic, consistent with national priorities and reasonably
achievable. For the purpose of the research, Africans, Coloureds, and Indians are represented by the term
“Blacks”. Whites are represented as “White” and foreigners will be excluded from some comparative analyses in
order to present a more accurate perspective of the South African workforce.
The SSP also focuses on top scarce and critical skills in the insurance and related-services sector. These skills
are aligned through a national coding system called The Organising Framework for Occupations (OFO), which is
a skills-based, coded classification system. It is built on similar principles to those of the South African Standard
Classification of Occupations (SASCO). The OFO represents a significant enhancement on the SASCO for skills
development planning and implementation purposes in that it captures all jobs in the form of occupation (similar
to SASCO) groups. In essence, the OFO is a coded occupational classification system. It is a key tool for
identifying, reporting, and monitoring skills demand and supply in the South African labour market. The major
occupational categories of the OFO are professional, management, clerical, sales, elementary, technical,
machinery operators and drivers, and community and personal service workers (Department of Higher
Education and Training, 2011).
1.3
Skills Levies and Grants
The INSETA represents the following constituents within the insurance sector:
x
Life insurance
x
Short-term insurance
x
Insurance and pension funding
x
Risk management
Page 28
x
Health care benefits administration
x
Unit trusts
x
Funeral insurance
x
Reinsurance
x
Pension funding
x
Activities auxiliary to financial intermediation
1.3.1 Mandatory Grants and the Skills Development Levies
In terms of the Skills Development Levies Act, 1998 (Act No. 97 of 1998), employers with an annual payroll of
R500 000 or more must pay a skills development levy of 1% of their total salary bill to the relevant Sector
Education and Training Authority (SETA) where the collection agent is the South African Revenue Service
(SARS).
The information box above right
reflects the prior March 2013 levy
allocations. The new 1 April 2013
levy allocations are displayed in
the information box below right.
When a comparative analysis is
carried out between the old and
new
levy
allocations,
a
key
observation is that the mandatory
grant has been reduced by 30%,
providing a reduced mandatory
grant rebate to employers of 20%.
The discretionary grant scheme
has increased by 29.5%, providing an increased discretionary grant rate of 49.5%. 0.5% has been allocated to
the Quality Council for Trades and Occupations (QCTO). This percentage will be managed by the INSETA,
along with the 10% administration fee. The National Skills Funds (NSF) is allocated 18% of grant allocations and
2% of the skills levy grant allocation is given to SARS for administrative purposes.
One view expressed for the reasoning behind the amendment of grant allocations is that if workplace skills
plans, including simplified plans for small and micro-enterprises, are turned into entry points for discretionary
grants and programmes, there is a possibility that this may increase participation by stakeholders (Department of
Higher Education and Training, 2012: 2-3).
Page 29
1.3.2 Discretionary Grants
1.3.2.1 The Inseta Projects
The INSETA’s discretionary grant projects fall under four major programmes that are tapered to fit the
requirements of the National Skills Development Strategy III (NSDS III) goals and indicators.
A breakdown of programmes funded through discretionary grants can be seen from the pie chart below.
Figure 1-1: Programmes funded through discretionary grants
All of the INSETA discretionary projects fall into one of the programmes that support the strategic outcome
oriented goals and NSDS III indicators. The goal is to continue increasing the spend rate in order to optimise
impact in the sector. Discretionary grant projects that are active in the 2011/12 financial year are distributed
across the programmes’ research and benchmarking; youth education and development; scarce and critical
skills; small and micro-enterprise developments (Insurance Sector Education and Training Authority, 2012). The
programmes listed above are funded through a combination of the three different types of the grants that are
discussed below.
Types of Discretionary Grants
INSETA will periodically make three types of discretionary grant projects available.
Funding windows
The INSETA will open a funding window during the course of the year for applications for learnerships,
internships, bursaries, and special projects. A stakeholder must be registered with the INSETA in order to
receive communiqué about the funding window. Stakeholders are briefed about the funding windows during the
INSETA annual road shows.
Strategic projects
The INSETA identifies strategic projects based on the scarce and critical skills requirements as set out in the
annual SSP. The INSETA will then motivate for these types of projects to be funded by the INSETA Board in
order to achieve the INSETA’s Strategic Plan and Annual Performance Plan.
1.3.2.2 The Introduction of Pivotal Grants into the Insurance Sector
Joint ventures and strategic partnerships
The INSETA will form a joint venture or partnership with various stakeholder groupings or higher education
institutions in order to achieve the objectives of the INSETA’s Strategic Plan and Annual Performance Plan.
The Ministerial Task Team’s research into discretionary spending during NSDS III found that 80% of funds are
actually spent on Professional, Vocational, Technical and Academic Learning (PIVOTAL) programmes. The
Page 30
focus should now be on the quality and impact of such programmes. There is intense scrutiny to establish
whether underspending exists as well as to determine whether there has been an accumulation of surpluses.
The Ministerial Task Team has been appealing to Sector Education and Training Authorities (SETAs) to better
plan their spending. The requirement is to spend 95% of funds, with large amounts being committed. A decision
is taken to fund the QCTO shortfall from levy income due to the important role the QCTO will play in the roll out
of PIVOTAL programmes (Department of Higher Education and Training, 2012: 2-3).
The PIVOTAL grant makes provision for the delivery of National Qualifications Framework (NQF) registered and
quality assured PIVOTAL programmes that focus on scarce and critical priority skills needs as extracted from the
SSP. Therefore, as a first step to implementing the above grant, we need to align our PIVOTAL programmes to
identified scarce and critical skills.
In order for our SETA to implement the PIVOTAL grant, a worthy starting point is the definition of PIVOTAL – this
refers to professional, vocational, technical and academic learning programmes that result in qualifications or
part qualifications on the NQF.
In order to action PIVOTAL grants, the following needs to be actioned:
x
Address the key skills needs in our economy
x
The key economic skills must address both classroom and workplace learning.
x
Cater for programmes on all levels
1.4
Plans for Skilling the Insurance Sector under the New Quality Assurance
Framework
The INSETA’s Education Training and Quality Assurance (ETQA) division is accredited by the South African
Qualifications Authority (SAQA) as an Education and Training Authority under the Skills Development Act.
1.4.1 New Education Training and Quality Assurance Landscape, and Partnerships
The ETQA function has become the prerogative of the QCTO. Various models will be used in determining the
allocation of the role of quality assurance and qualifications development to various bodies. The QCTO started
to function with the appointment of staff in 2012. The QCTO is beginning to collaborate with SETAs in an effort
to develop a national framework of occupational qualifications. Our ETQA worked in collaboration with other
ETQAs and the QCTO to develop a national best practice model for quality assuring occupational qualifications
across all economic sectors. Draft policies are co-authored with other ETQAs and the QCTO. These draft
policies range from the Skills Provider Accreditation Policy to the Assessor and Moderator Policy. Recent
projects run by the INSETA ETQA include registering the INSETA project specialist at national level and raising
awareness of QCTO structures. Highlights included the gazetting of two occupational qualifications for public
comment.
The National Qualification Framework Act, 2008 (Act No. 67 of 2008), as amended in 2008, brought changes to
the quality assurance role of SETAs and the ETQA function now becomes the mandate of the QCTO. While
SAQA remains the apex body over the quality councils, the QCTO will in future assume the responsibilities
traditionally carried out by the SETAs’ ETQA division. The QCTO will consider models for delegating
qualifications development and quality assurance functions to suitable bodies, and the INSETA’s role in quality
assurance will thus be established.
The following draft policies are co-developed and await QCTO board approval:
x
Skills Provider Accreditation Policy
x
Assessment Centre Accreditation Policy
x
Workplace Approval Policy
Page 31
x
1.5
External Integrated Summative Assessment Policy
x
Certification Policy
x
Assessor and Moderator Policy
Sector Profile
The insurance and related-services sector is a rapidly evolving, growing, and developing major player in the
South African economy. Over 2 000 employers have registered with SARS as levy payers within the insurance
sector. The INSETA represents an industry with a very wide range of employers, many of whom are very small
(about 10 employees or less) or very large employers (in excess of 5 000 employees). Most of the workforce
consists of skilled and highly skilled employees.
This section provides a detailed profile of the insurance and related-services sector by occupational category.
Three years of data are sampled for the purpose of this SSP update. In 2012, there are 155 large and medium
levy-paying companies sampled, and a separate sample of 772 small companies is collated to provide labour
market information that could be used to inform the labour market intelligence report that will follow. The 2013
data sets have been compared against that of the 2012 data and the results are displayed in the sections that
follow.
Page 32
17 921
532
Technicians &
trade workers
Total
502
Elementary
workers
8 000
Sales workers
223
2 065
Professionals
Machinery
operators &
drivers
1 505
408
Community &
personal service
Managers
4 686
African
Male
(2012)
Clerical & admin
workers
Occupational
Category
19 282
594
467
224
8 155
4 218
1 966
17
3 641
African
Male
(2013)
25 458
476
570
25
10 892
2 326
1 130
198
9 841
African
Female
(2012)
27 482
881
676
27
11 099
5 034
1 904
22
7 839
African
Female
(2013)
6 246
220
41
19
1 281
1 308
775
20
2 582
Coloure
d Male
(2012)
6 399
240
27
22
1 320
1 683
983
12
2 112
Coloure
d Male
(2013)
10 110
263
120
1
1 247
1 701
885
34
5 859
Coloure
d
Female
(2012)
10 238
281
81
5
2 070
1 928
1 126
10
4 737
Coloure
d
Female
(2013)
Table 1-1: Medium and large company employees in the insurance sector between 2012 and 2013
4 553
195
17
23
997
1 148
834
5
1 334
Indian
Male
(2012)
4 512
104
7
15
1 031
1 385
878
0
1 092
Indian
Male
(2013)
5 232
50
4
0
1 209
1 417
824
0
1 728
Indian
Female
(2013)
SECTOR SKILLS PLAN2014
5 331
278
31
0
708
1 171
720
2
2 421
Indian
Female
(2012)
13 448
301
31
11
3 053
4 419
3 603
12
2 018
White
Male
(2012)
12 606
88
6
7
3 208
4 585
3 517
8
1 187
White
Male
(2013)
17 641
474
52
0
2 753
4 451
3 052
17
6 842
White
Female
(2012)
16 980
223
6
0
4 547
4 456
3 062
1
4 685
White
Female
(2013)
55
0
46
356
11
2
4
57
181
Other
Male
(2012)
73
0
41
394
5
2
0
113
160
Other
Male
(2013)
246
22
0
0
24
88
31
1
80
Other
Female
(2012)
Page 33
265
5
0
0
56
118
42
0
44
Other
Female
(2013)
101 310
2 772
1 366
306
29 012
18 858
12 590
697
35 629
Total
(2012)
103 390
2 471
1 276
300
32 808
24 984
14 375
70
27106
Total
(2013)
17 921
Total
17
19 282
119
224
699
4255
I858
3592
African
Male
(2014)
25 458
881
676
25
11 099
5 034
1 904
198
7 839
African
Female
(2013)
27 482
451
27
853
5412
1858
22
8061
African
Female
(2014)
(Insurance Sector Education and Training Authority, 2012/2013)
594
467
Elementary
workers
Technicians &
trade workers
223
8 155
Sales workers
Machinery
operators &
drivers
4 218
1966
Professionals
Managers
4
Community &
personal service
08
3 641
African
Male
(2013)
Clerical & admin
workers
Occupational
Category
6 246
240
27
19
1 320
1 683
983
20
2 112
Coloured
Male (2013)
6 399
20
22
180
1745
882
12
2121
Colour
ed Male
(2014)
10 110
281
81
1
2 070
1 928
1 126
34
4 737
Coloured
Female
(2013)
10 238
73
5
217
2046
1010
10
4714
Coloured
Female
(2014)
Table 1-1: Medium and large company employees in the insurance sector between 2013 and 2014
4 553
104
7
23
1 031
1 385
878
5
1 0921
Indian
Male
(2013)
2
5 331
50
4
0
1 209
1 417
824
11 728
Indian
Female
(2013)
5 232
3
0
72
1455
786
0
1800
Indian
Female
(2014)
4 512
5
15
115
1469
862
0
1008
Indian
Male
(2014)
13 448
88
6
11
3 208
4 585
3 517
12
1187
White
Male
(2013)
12 606
11
7
143
4869
3406
8
1086
White
Male
(2014)
6
0
17 641
223
4 547
4 456
3 062
17
4 685
White
Female
(2013)
16 980
3
0
158
4523
3113
1
4326
White
Female
(2014)
73
0
41
356
5
2
4
113
160
Other
Male
(2013)
71
0
29
394
4
0
3
141
Other
Male
(2014)
Page 34
246
5
0
0
56
118
42
1
44
Other
Female
(2013)
265
3
0
4
99
33
0
48
Other
Female
(2014)
101 310
2 471
1 276
306
32 808
24 984
14 375
697
27106
Total
(2013)
103 390
692
300
2444
26014
13865
70
26785
Total
(2014)
African
Male
-12%
-96%
34%
104%
2%
0%
-7%
12%
8%
African
Male
-24%
-17%
-14%
-56%
66%
-41%
-6%
42%
-12%
Medium & Large Company Employees:
Occupational Category
Clerical & admin workers
Community & personal service
Managers
Professionals
Sales workers
Machinery operators & drivers
Elementary workers
Technicians & trade workers
Total
Small Company Employees: Occupational
Category
Managers
Professionals
Sales workers
Elementary workers
Total
-9%
-34%
-100%
-1%
-42%
129%
-50%
-18%
840%
African
Female
-23%
-89%
45%
116%
2%
8%
19%
85%
8%
African
Female
-26%
-28%
0%
-20%
-70%
38%
-25%
-71%
-13%
Coloured
Male
-11%
-40%
22%
29%
3%
16%
-34%
9%
2%
Coloured
Male
-7%
-21%
0%
22%
-59%
71%
0%
-43%
1 600%
Coloured
Female
-20%
-71%
23%
13%
66%
400%
-33%
7%
1%
Coloured
Female
8%
-8%
0%
-11%
-53%
224%
100%
-100%
0%
Indian
Male
-23%
-100%
10%
21%
3%
-35%
-59%
-47%
-1%
Indian
Male
Table 1-3: Medium and large company, and small company change in employees in the insurance sector in 2013
-12%
-27%
0%
-30%
-51%
111%
0%
0%
100%
Indian
Female
-31%
-100%
17%
21%
71%
0%
-87%
-82%
-2%
Indian
Female
-17%
-48%
33%
-18%
-60%
155%
-80%
-100%
-12%
White
Male
-44%
-33%
-3%
4%
5%
-36%
-81%
-71%
-6%
White
Male
-17%
-35%
-70%
-17%
-63%
99%
0%
0%
181%
White
Female
-26%
-94%
5%
0%
65%
0%
-88%
-53%
-4%
White
Female
-14%
-32%
-34%
-16%
-59%
109%
-44%
-22%
118%
Total
-35%
-90%
8%
32%
13%
-2%
-7%
-11%
2%
Total
Page 35
-20%
-89%
68%
116%
2%
8%
19%
85%
8%
African
Female
-22%
-96%
31%
104%
2%
0%
-7%
12%
8%
African
Male
-24%
-17%
-14%
-56%
66%
-41%
-6%
42%
-12%
Managers
Professionals
Sales workers
Elementary workers
Total
-34%
-100%
-1%
-42%
129%
-50%
-18%
840%
-9%
African
Female
African
Male
Medium & Large Company
Employees: Occupational
Category
Managers
Professionals
Sales workers
Elementary workers
Total
Small Company Employees:
-21%
0%
22%
-59%
71%
0%
-43%
1 600%
-7%
-19%
-71%
27%
13%
66%
400%
-33%
7%
1%
Coloured
Female
Coloured
Female
-28%
0%
-20%
-70%
38%
-25%
-71%
-13%
-26%
-18%
-40%
27%
29%
3%
16%
-34%
9%
2%
Coloured
Male
Coloured
Male
-8%
0%
-11%
-53%
224%
100%
-100%
0%
8%
-18%
-100%
5%
21%
3%
-35%
-59%
-47%
-1%
Indian
Male
Indian
Male
Table 1-4: Medium and large company, and small company change in employees in the insurance sector in 2013
-27%
0%
-30%
-51%
111%
0%
0%
100%
-12%
-29%
-100%
14%
21%
71%
0%
-87%
-82%
-2%
Indian
Female
Indian
Female
-48%
33%
-18%
-60%
155%
-80%
-100%
-12%
-17%
-41%
-33%
-2%
4%
5%
-36%
-81%
-71%
-6%
White
Male
White
Male
Page 36
-35%
-70%
-17%
-63%
99%
0%
0%
181%
-17%
-32%
-94%
0%
0%
65%
0%
-88%
-53%
-4%
White
Female
White
Female
-32%
-34%
-16%
-59%
109%
-44%
-22%
118%
-14%
-24%
-90%
14%
32%
13%
-2%
-7%
-11%
2%
Total
Total
Clerical support workers
Elementary occupations
Machinery operators and drivers
Managers
Professionals
Service and sales workers
Technicians and associate professionals
Total Increase/Decrease
Comparison
Clerical support workers
Elementary occupations
Managers
Professionals
Technicians and associate professionals
Total
2012 – 2013
Clerical and administrative workers
Elementary workers
Managers
Professionals
Technicians and trades workers
Total
2011 – 2012
African
Male
-24%
-7%
5%
26%
107%
2%
-1%
8.87%
African
Male
3 437
456
207
1 807
4 065
7 847
511
18 330
African
Male
4 521
488
198
1 434
1 964
7 714
517
16 836
African
Female
-21%
22%
69%
62%
122%
2%
67%
8.47%
African
Female
7 476
631
27
1 757
4 842
10 684
793
26 210
African
Female
9 432
516
16
1 085
2 181
10 458
476
24 164
Coloured
Male
-19%
-31%
0%
27%
27%
-3%
4%
0.54%
Coloured
Male
2 050
27
19
944
1 627
1 213
229
6 109
Coloured
Male
2 523
39
19
742
1 277
1 256
220
6 076
-20%
-32%
400%
27%
11%
55%
-1%
-0.99%
Coloured Female
4 537
79
5
1 076
1 826
1 846
259
9 628
Coloured Female
5 653
117
1
849
1 649
1 193
262
9 724
Coloured Female
Indian
Male
-19%
-59%
-43%
4%
21%
-4%
-57%
-3.75%
Indian
Male
1 046
7
13
835
1 303
917
83
4 204
Indian
Male
1 299
17
23
801
1 079
956
193
4 368
Indian
Female
-31%
-87%
0%
13%
16%
55%
-86%
-7.27%
Indian
Female
1 603
4
0
789
1 281
1 002
40
4 719
Indian
Female
2 324
31
0
700
1 109
647
278
5 089
White
Male
-44%
-80%
-45%
-4%
1%
1%
-81%
-9.16%
White
Male
1 099
6
6
3 276
4 297
3 004
54
11 742
White
Male
1 966
30
11
3 407
4 244
2 977
291
12 926
Table 1-5: Employment category versus race comparison for 2012-2013 medium and large companies present in both the 2012 and 2013 WSP database (1-1a)
Page 37
White
Female
-34%
-88%
0%
-2%
-4%
58%
-74%
-8.02%
White
Female
4 317
6
0
2 816
4 104
4 005
125
15 373
White
Female
6 496
51
0
2 888
4 271
2 534
474
16 714
Other
Male
-25%
0%
-100%
31%
-11%
191%
-55%
13.15%
Other
Male
33
2
0
71
157
102
5
370
Other
Male
44
2
4
54
177
35
11
327
Other
Female
-48%
0%
0%
32%
26%
117%
-77%
1.65%
Other
Female
42
0
0
41
108
50
5
246
Other
Female
80
0
0
31
86
23
22
242
Row
Total
-25%
-6%
2%
12%
31%
10%
-23%
0.48%
Row
Total
25 640
1 218
277
13 412
23 610
30 670
2 104
96 931
Row
Total
34 338
1 291
272
11 991
18 037
27 793
2 744
96 466
By comparing Table and Table above, it is possible to evaluate the data for 2012-2013 and 2013-2014. It is
pleasing to note that of the Black professionals, Africans (both male and female) are the highest growing
category, showing over 100% growth in the last financial year. Areas where jobs are lost are in the community
and personal service category (with a decline of 90%) as well as in the clerical and admin workers category (with
a decline of 24%).
Table shows that for 2012 there are 101 310 people employed within the 155 levy-paying medium and large
companies sampled who are registered with the INSETA and they fall within the eight occupational categories
listed. The occupational category which employs the majority of people is the clerical and admin workers
category at 35 709, followed by the sales worker category at 29 012 and the professionals category at 18 858.
For 2013, the same table shows that the total number of employees employed for 2013 is 103 390. The
occupational category which employs the majority of people is the sales worker category at 32 808, followed by
clerical and admin workers at 27 106 and professionals at 24 984.
Table looks at the sub-set of companies that are present in the sector in both 2012 and 2013 (125 companies in
total). The table outlines a comparison between employment category and racial profile. It is interesting to note
that in this sub-set of companies there has been a net increase in employment. For this group, employment has
fallen from 96 466 to 96 931. This shows that sector growth is coming from new entrants as well as mergers and
acquisitions. This also shows that as the sector is becoming more competitive, companies are being forced to
become racially compliant and they are doing this by cutting jobs in certain racial groups while increasing these
in other groups. It is only within the African Male, Other Male, and African Female racial groups that there has
been significant growth. The greatest employment categories that have seen growth in the last year have been
the professionals (31% increase), managers (12 % increase) and sales workers (10% increase) categories,
while the clerical and admin workers employment category has seen the greatest decrease in employment (25%).
According to Figure 1-2, the majority of people in the occupational categories for 2012 are Black at 66% (70
221), followed by Whites at 24% (31 089) (Insurance Sector Education and Training Authority, 2011/2012). For
the year 2011, in the same figure, there were 65% Black employees, and 35% White employees. The 2013 data
show that there is 69% Black employees and 31% White employees.
Overall, as seen in Figure 1-2, there are more Blacks represented in the insurance and related-services sector
than Whites.
Figure 1-2: Racial representation in the sector from 2011 to 2013
(Insurance Sector Education and Training Authority, 2011/2012/2013)
Table 1-2 shows that there are 9024 people who are employed within the 772 levy-paying small companies
sampled who registered with INSETA, and they fall within eight occupational categories shown in
Page 38
the table. The occupational category which
employs
changed
the
majority
from
the
of
people
clerical
has
and
administrative worker category in 2012 to
sales workers in 2013 (growth in the
segment is over 100%). It is interesting to
note that the clerical and admin workers category has shrunk in both the small and the medium and large
business categories. Other areas of growth that should be noted for small businesses are in the technicians and
trade workers category which also increased by over 100%.
Page 39
708
47
59
47
213
68
82
20
172
African
Male
(2013)
1 396
5
274
2
161
145
75
6
728
African
Female
(2012)
1 276
47
224
1
369
84
74
0
477
African
Female
(2013)
804
33
Technicians
trade workers
Total
63
Elementary
workers
&
80
Machinery
operators & drivers
128
Sales workers
95
Managers
155
24
Community
&
personal service
Professionals
226
African
Male
(2012)
admin
Clerical &
workers
Occupational
Category
253
8
17
4
40
53
51
0
80
Coloured
Male
(2012)
186
7
5
3
55
16
41
1
58
Coloured
Male
(2013)
609
2
28
0
76
83
41
1
378
Coloured
Female
(2012)
565
34
16
0
130
34
50
1
300
Coloured
Female
(2013)
5
1
1
25
53
55
0
65
Page 40
205
Indian
Male
(2012)
Table 1-2: Small company employees in the insurance and related-services sector between 2012 and 2013
5
0
2
81
25
49
0
60
520
3
0
0
74
95
63
0
285
Indian
Female
(2012)
460
6
0
0
156
47
44
0
207
Indian
Female
(2013)
222
Indian
Male
(2013)
2 403
25
3
5
257
772
1 043
3
295
White
Male
(2012)
2 002
22
0
1
656
305
860
4
154
White
Male
(2013)
4 284
16
1
0
610
816
688
10
2 143
White
Female
(2012)
3 538
45
1
0
1 213
305
568
3
1403
White
Female
(2013)
Other
Male
(2012)
30
3
1
4
4
11
6
0
1
Other
Male
(2013)
42
5
1
0
11
9
9
0
7
0
4
0
6
7
1
0
8
26
Other
Female
(2012)
25
0
0
0
9
2
1
0
13
Other
Female
(2013)
10 530
100
392
96
1 381
2 190
2 118
44
4 209
Total
(2012)
9 024
218
306
54
2 893
895
1 778
29
2 851
Total
(2013)
Life insurance
Pension funding
Health care benefits administration
Funeral insurance
Reinsurance
Auxiliary activities (includes brokers
and intermediaries)
Unit trusts
Risk management
Insurance & pension fund (except
compulsory social security)
276
30
63
588
29
33
467
2013
26
48
228
2012 – 2013
0%
9%
0%
10%
-12%
0%
2%
4%
43%
1%
LPE
Growth
251
34
63
574
28
23
461
2012
26
44
228
217
30
55
425
23
21
491
2011
24
37
204
Table 1-7: List of levy and non-levy payers registered with the INSETA between 2010 and 2013
247
35
68
402
23
22
578
2010
26
39
228
Page 41
1 442
350
141
4 576
148
49
2 328
2012
107
116
2 060
NLPE
1 397
347
129
2 232
118
48
4 018
2010
102
107
2 036
1 427
352
142
2 269
118
49
4 045
2011
104
109
2 060
Table 1-7 above shows the number of registered levy and non-levy payers with the INSETA from 2010
through to 2013. There are a significantly higher number of non-levy payers compared to levy payers
registered. However, many of these companies do not contribute towards skills levies. This is because
many of the non-levy payers are smaller companies with a staff complement of one or two employees and
their payroll does not exceed R500 000 p.a. It must also be noted that many small or micro companies do
not pay skills levies, but should in fact be doing so. In this regard, the INSETA has been collaborating with
industry bodies and professional associations to create an awareness of support being offered by the
INSETA. Table 7 clearly shows that the majority of levy-paying stakeholders fall within the auxiliary
activities, short-term insurance, life insurance and insurance and pension fund subsectors, and the same
applies to non-levy payers. For gathering labour market information for this SSP, only 927 levy-paying
companies are sampled out of the 1 774 registered with the INSETA. Some of the limitations in conducting
this analysis are in identifying which employers fall within the correct subsector categories. Whilst the
Financial Services Board (FSB), has only registered a certain number of short-term and long-term insurers,
we find that employers, mostly intermediaries, have categorised themselves under the short-term and longterm category. This has skewed our statistics in terms of subsector representation. However, the INSETA
plans to engage with the Department of Higher Education and Training (DHET), in 2013, to rearrange
subsector codes with the insurance sector.
Once employers fall within the correct subsectors, analysis that is more accurate can be conducted.
Table 1-8: Small, medium and large levy and non-levy-paying organisations (employers) in the insurance and
related-services sector between 2010 and 2013
Type
Large
Medium
Small
2013
70
86
1 632
2012
108
83
1 583
2011
123
170
11 909
2010
115
180
11 907
Total
1 788
1 774
12 202
12 202
Note for 2012 & 2013 figures:(Insurance Sector Education and Training Authority, 2012/2013)
Table 1-8 above shows that there are 1 583 small levy-paying companies registered with the INSETA in
2012, with the number increasing to 1 632 in 2013. Based on a sample (refer to Table 1-2). 772 of these
companies employ the smallest number of the workforce in the sector (9 024) compared to the sample of
155 companies (refer to Table ), in the sector which employs the overall majority (103 390), of the
workforce in the sector.
Table 1-9: Number of employees within small, medium, and large registered levy-paying organisations sampled
between 2010 and 2013
Type
Large
Medium
Small
2013
2012
2011
2010
96 502
94 002
89 464
86 452
6 857
7 211
7 000
7 514
9 037
10 627
10 125
8 942
112
111
106
102
Total
396
840
589
908
(Insurance Sector Education and Training Authority, 2013)
Table 1-9 shows that the insurance sector employed 111 840 people between 1 April 2011 and 31 March
2012. This number increased in the last financial year to 112 369. This is based on the total registered
companies with the INSETA (1 788). Note that growth in employment has taken place only in the large
companies with both the small and medium companies having shed jobs in the last financial year. The
majority of people are employed by large organisations at 96 502 and the minority of the workforce is
employed by medium companies at 6 857 which is no different from the previous year’s statistics. Small
and micro companies also have a huge workforce in the sector and this is probably the reason why the
National Development Plan (NDP), NSDS, along with other key economic growth documents encourages
the growth and development of small businesses. Small businesses are important to driving employment
rates up. It can be concluded from Table 9 that there is a 556 increase in the number of employees
Page 42
between 2012 and 2013 and a 3 681 increase in the number of employees between 2010 and 2011. This is
also supported by the survey below.
According to the statistics in the South Africa Quarterly Labour Force Survey:
“The total number of employees as at March 2012 stands at 1 834 000 in the financial intermediation,
insurance, real estate and business services industry. Compared to the period March 2011, there is a total
number of 1 798 000 in the sector. The financial intermediation, insurance, real estate and business
services industry reported an annual increase of 36 000 employees (+2.0%), in March 2012 compared with
March 2011. There is a quarterly increase of 3 000 employees (+0.2%), in March 2012 compared with
December 2011. This is mainly due to increases in employment activities auxiliary to financial
intermediation; real estate activities; financial intermediation, except insurance and pension funding; and
other business activities (architectural, engineering and other technical activities; legal, accounting,
bookkeeping and auditing activities)” (Statistics South Africa, 2012).
1.6
The Insurance Subsectors and Employers in the Sector
The insurance and related-services sector is categorised according to the Standard Industrial Classification
(SIC) codes. The sector is then classified into 10 categories of the SIC codes. The SIC codes, as seen in
Figure 1-3, range from unit trusts to activities auxiliary to insurance. The distribution of employers according
to some SIC codes is discussed here. Due to the incorrect allocation of employers to various SIC codes,
the INSETA sampled around 700 companies in five of the subsectors to see where the majority of
employers are categorised. The intermediaries subsector is identified as holding the largest number of
employers registered with the INSETA, whilst pension funds, funeral insurance, and reinsurance reflected
the lowest number of companies registered (2% per category).
Figure 1-3: Number of employers registered with the INSETA by SIC code for 2013
Page 43
1.7
Employee Provincial Spread
Table 1-10: Employee spread (percentage) over the nine provinces between 2011 and 2013
Provincial
Breakdown
GP
WC
EC
NC
FS
NW
MP
LMP
KZN
2012 – 2013
2011 – 2012
2010 – 2011
55%
53%
52%
21%
21%
26%
5%
5%
4%
1%
1%
1%
3%
3%
2%
2%
2%
1%
2%
2%
2%
1%
2%
2%
10%
11%
10%
Table 1-11: Employee spread (numbers) over the nine provinces 2012 – 2013
Provincial
Breakdown
GP
WC
EC
NC
FS
NW
MP
LMP
KZN
Total
Large & medium
Small
Total
56 419
5 060
61 479
22 264
1 421
23 685
5 475
626
6 101
841
66
907
2 698
163
2 861
1 850
92
1 942
1 991
97
2 088
2 067
105
2 172
9 757
1 341
11 098
103 362
8 971
112 333
Table 1-12 Employee spread over the 9 provinces in 2014
Provincial Breakdown
GP
%
WC
%
EC
%
NC
%
FS
%
Large & medium
45 593
53.1
21 251
24.9
4894
5.69
681
0.79
267
0.31
Small
2104
56.2
752
20.2
63
1.68%
15
0.4
39
1.01%
Provincial Breakdown
NW
%
MP
%
LMP
%
KZN
%
Large & medium
1792
2.08
1798
2.09
1805
2.1
7819
9.1
32
0.85
48
1.28
658
17.7
Small
17
0.45
Total
85 900
3728
WSP data 2014
From the above table it can be seen in relation to medium and large levy-paying companies in descending order
of importance from the highest to the lowest concentration of employees that Gauteng has the highest number of
employees followed by the Western Cape, Kwazulu-Natal, Eastern Cape, Limpopo, Mpumalanga, North-West,
Northern Cape, and finally, Free State. From the same table it can be seen in relation to small levy-paying
companies in descending order of importance that Gauteng has the highest concentration of employees followed
by the Western Cape, Kwazulu-Natal, the Eastern Cape Limpopo, Free State, Mpumalanga, and Northern Cape.
Of the 112 333 employees sampled from large, medium and small companies, the majority of employees (55%)
are located in Gauteng, followed by 21% in the Western Cape and 10% in KwaZulu-Natal. Note that while
Gauteng numbers have increased in the last year, the numbers for the Western Cape have remained stable.
The lowest number of employees are in the Northern Cape (1%) and Limpopo (1%), followed by Mpumalanga
(2%), North West (2%) and Free State (2%). (Note that these numbers have stayed constant when compared to
2012, only KwaZulu-Natal and Limpopo registered a drop of 1%).
In summary, the provincial concentrations strongly imply that skills development priorities have been focused on
the high-density regions, as the INSETA can only run learnerships and internships where there are workplaces.
Since August 2012, a concerted campaign has been underway to identify businesses in the industry in the lowdensity provinces. In addition, looking at the products that these employers offer in order to put learners on
relevant qualifications will make placement of learners easier in these areas. What follows in the tables below is
a more in depth assessment of the provincial spread on the insurance sector as well as a breakdown on a
provincial basis of the training that had taken place in 2012.
Page 44
Table 1-13: Branches and employees reflecting the provincial spread
Provincial
Breakdown
Gauteng
Western Cape
Eastern Cape
Northern Cape
Free State
North West
Mpumalanga
Limpopo
Kwa-Zulu Natal
Branches
197
128
80
30
66
45
46
44
109
Branch
Percentage
26.40%
17.20%
10.70%
4.00%
8.90%
6.00%
6.20%
5.90%
14.60%
Employee
56 419
22 264
5 475
841
2 698
1 850
1 991
2 067
9 757
Employee
Percentage
54.60%
21.50%
5.30%
0.80%
2.60%
1.80%
1.90%
2.00%
9.40%
Table 13 outlines the provincial breakdown of the medium and large businesses that formed part of the
2013 Workplace Skills Plan (WSP). From the table it is evident that the greatest concentration of the
companies is within Gauteng (26.4% of the branches) and the Western Cape (17.2% of all branches). This
is followed by KwaZulu-Natal (14.6%) and the Eastern Cape (10.7%). The employee distribution follows the
same pattern; however, it is interesting to note that just fewer than 55% of all employees are based in the
Gauteng, which is possible due to the high number of insurers who have their head offices in Gauteng. The
smallest concentration of branches and employees is within the Northern Cape.
The table below looks specifically at training across the different provinces and the various employment
categories. As Gauteng is the largest employer, it is not surprising that the province also has the greatest
number of individuals that are being trained (56%) followed by the Western Cape (20%) and KwaZulu-Natal
(10%). The greatest training categories are professionals and clerical and admin workers, followed by
managers.
Table 1-14: Training across provinces and employment categories
Training
Category
Clerical & admin
workers
Community &
personal service
workers
Elementary
workers
Machinery
operators &
drivers
Managers
Professionals
Sales workers
Technicians and
trade workers
EC
FS
GP
KZN
LP
MP
NC
NW
WC
Total
Percentage
91
41
948
175
28
27
17
40
330
1 697
30.40%
1
0
18
3
0
0
0
0
10
32
0.60%
5
1
66
8
0
1
0
1
9
91
1.60%
2
0
32
2
0
0
0
0
7
43
0.80%
74
54
48
2
35
25
20
2
819
1 032
142
63
166
145
54
12
27
14
22
2
28
13
18
2
9
3
13
1
44
29
25
1
290
401
56
23
1 492
1 716
398
108
26.80%
30.80%
7.10%
1.90%
Page 45
1.8
Racial Breakdown in the Sector
Figure 1-4 shows that Africans (43%) comprise the majority of employees in the sector that has grown over
the last three years from 39% in 2011. Whites still comprise the second highest (31%), followed by
Coloureds (16%), and then Indians (9%). Overall, there are more Blacks compared to Whites in the sector.
Racial Breakdown 2013
50%
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
2011
2012
2013
African
39%
41%
43%
Coloured
16%
15%
16%
Indian
9%
9%
9%
White
35%
34%
31%
Other
1%
1%
1%
Figure 1-4: Employee racial breakdown
However, in Figure 1-5 which shows the racial breakdown per occupational category, Whites still dominate
the managers and professionals categories as reported by the insurance sector. However, as noted earlier,
the number of Black professionals is increasing. What remains to be seen is for these professionals to
move into management positions.
Figure 1-5: Racial breakdown in the managers and professionals occupational categories (percentage)
Table 1-15: Racial breakdown in the managers and professionals occupational categories
Occupational
African
Coloured
Indian
Class 2013
Managers
4 061
2 229
1 815
(number)
Managers
25%
14%
11%
(percentage)
Professionals
9 447
3 713
2 894
(number)
Professionals
36%
14%
11%
(percentage)
White
Other
Total
8 085
125
16
315
50%
1%
9 776
289
37%
1%
26
119
Page 46
1.9
Occupational Class by Age
Figure 1-6 shows the distribution of employees by age within each occupational category (the total
workforce is relatively young). The age groups dominating the sector comprise the 34 years and younger,
and the 35 to 49 years of age categories and are also the dominating groups within the clerical support
workers and service and sales workers categories.
This represents a positive picture for the sector, because relatively young people are working in it who are
then able to have progressive career paths, considering the number of employed people aged 65 and over
(Insurance Sector Education and Training Authority, 2013), have still remained very small. This means that
there is a sufficient supply currently within the industry to replace retired workers, although technical
insurance skills transfer from retiring employees to new workers should be encouraged through certain
interventions.
The age distribution highlights the need for skills development in conjunction with career guidance
interventions for employees in the sector in order to promote career paths and thereby retain skills in the
sector. This would be especially useful with regard to the replacement of retired workers, as this would
require complementary skills and experience and the latter can only be obtained by working in the industry
for a long time.
Occupational Class by Age 2013
TECHNICIANS AND TRADE WORKERS
SKILLED…
SALES WORKERS
PROFESSIONALS
PLANT AND MACHINE OPERATORS
MANAGERS
ELEMENTARY WORKERS
CLERICAL AND ADMIN WORKERS
0%
10%
20%
30%
40%
50%
60%
70%
80%
SKILLED
AGRICUL
TURAL,F
ORESTRY TECHNICI
PLANT
CLERICAL
ELEMENT
AND
SALES ,FISHERY, ANS AND
AND
ARY
MANAGE
PROFESS
WORKER CRAFT
TRADE
MACHINE
ADMIN
WORKER
RS
IONALS
WORKER
AND
OPERATO
WORKER
S
S
S
RELATED
RS
S
TRADE
WORKER
S
<34
56%
34%
29%
35%
45%
74%
57%
47%
35-49
34%
44%
51%
28%
43%
20%
34%
40%
50-64
10%
21%
19%
24%
12%
5%
9%
12%
65+
0%
1%
1%
3%
1%
0%
0%
1%
Figure 1-6: Age distribution of employees in relation to occupational categories from the registered INSETA
small, medium, and large levy-paying organisations sampled
Table 1-16 below looks in more depth at the data presented in the figure above. As in Table , this table
looks at a sub-set of companies that existed in both the 2012 and 2013 WSP database. The table provides
both the values and percentage changes. The results of the table are in line with the racial versus
Page 47
employment profiling outlined earlier in the document i.e. the greatest areas of employment growth in the
last year have been managers followed by professionals and sales workers. It is pleasing to note that the
bulk of the growth in these categories (except for the managers’ category) is within either the 34 or younger
or the 35 to 49 categories (as in the case of sales workers). This augers well for the sector, as it shows that
the bulk of the jobs that are being created are for younger candidates who can grow and develop.
Table 1-16: Employment category versus age comparison for 2012-2013 medium and large companies present in
both the 2012 and 2013 WSP database
Occupational Categories for 2012-2013
<34
35-49
50-64
65+
Elementary workers
Managers
Professionals
Sales workers
Total
17 962
547
91
2 986
7 610
16 407
1 225
46 828
12 836
483
104
6 754
8 196
8 602
1 189
38 164
103
7
5
55
121
241
9
541
Occupational Category for 2013-2014
<34
35-49
3 437
254
72
2 196
2 110
2 543
321
10
933
50-64
Elementary workers
Managers
Professionals
Sales workers
Total
14 578
472
111
4 192
10 548
14 847
1 556
44 748
8 560
509
96
6 858
10 088
12 172
426
38 283
44
7
5
95
152
246
9
549
Occupational Category for 2013_2014 Comparison
<34
35-49
2 458
230
65
2 267
2 822
3 405
113
11
247
50-64
Elementary workers
Managers
Professionals
Sales workers
Total increase/decrease
-19%
-14%
22%
40%
39%
-10%
27%
-4.44%
-33%
5%
-8%
2%
23%
42%
-64%
0.31%
-28%
-9%
-10%
3%
34%
34%
-65%
2.87%
-57%
0%
0%
73%
26%
2%
0%
1.48%
65+
65+
Row
Total
34 338
1 291
272
11 991
18 037
27 793
2 744
96 466
Row
Total
25 640
1 218
277
13 412
23 610
30 670
2 104
94 827
Row
Total
-25%
-6%
2%
12%
31%
10%
-23%
-1.70%
Page 48
1.10
Distribution of Employees by Gender and Disability
Overall, the sector employs 42% males and 58% females, as can be seen in Figure 1-7 below
Note: The sector employs around 1% foreigners, with male foreigners dominating.
Figure 1-7: Distribution of males and females in the registered INSETA levy-paying small, medium and large
organisations
While the figure above assesses the overall gender split between 2011 and 2013 amongst all small,
medium, and large organisations in the sector, the table below (Table 1-17) provides further details
regarding the gender split per racial group as well as the change in the White versus non-White gender
profiles in the sector. As in the previous tables, this data is for the sub-set of companies that are present in
both the 2012 and 2013 WSP database.
From the table below, it is evident that there has been a decrease in both the male and female proportion of
individuals in the sector. The female gender group has seen the greatest decrease, falling by 1.75% as
opposed to the male group that has only fallen by 1.63%. This result is further exacerbated by the fact that
there are at least 50% more women working in the sector than men. While these decreases are not
significant, they are of concern especially if these trends continue going forward. With respect to racial
profiling, it is within the White (-8.77%) and Indian (-8.06%) that the greatest decrease in female
employment is seen, however it is pleasing to note that in both the Male and Female African racial
category, increases of over 5% have been seen.
Table 1-1-37: Distribution of male and female employees in medium and large levy-paying companies
Male employees
Female employees
31,114
44,460
Total:
75,574
WSP data 2014
From the above table it can be seen that female employees outnumber male employees by 13,346.
Page 49
70
60
50
40
30
20
10
0
MaleEmployees
FemaleEmployees
Figure 1-8 Percentage distribution of males and females in large and medium levy-paying companies during
2014
Male employees constitute 41.17% of employees in the 2014 WSP sample while females constitute 58.82%
of employees in the same sample. Therefore, female employees outnumber male employees by 17.65%.
Table 1-18 Distribution of male and female employees within small levy paying companies
Male Employees
Female Employees
2,496
4,839
Total
7,335
70
60
50
40
30
20
10
0
Male Employees
Female Employees
Figure 1-9 Percentage distribution of male & female employees in small levy-paying companies during 2014
From the above figure, it can be seen that male employees constitute 34.02% of the total no. employees in
small levy-paying companies for 2014, while females in the same sample comprise 65.97%. Therefore,
female employees outnumber male employees by 31.95%
Page 50
Table 1-19: Gender analysis for 2012-2013 medium and large companies present in both the 2012 and 2013 WSP
database
Gender
Male
2013
Female 2013
Male
2012
Female 2012
Percentage Change
Male
Percentage Change
Female
African
Coloured
Indian
White
Other
Total
17 819
5 880
4 121
11 688
365
39 873
25 417
9 369
4 679
15 248
241
54 954
16 836
6 076
4 368
12 926
327
40 533
24 164
9 724
5 089
16 714
242
55 933
5.84%
-3.23%
-5.65%
-9.58%
11.62%
-1.63%
5.19%
-3.65%
-8.06%
-8.77%
-0.41%
-1.75%
Total Gender Split
Percentage
Male
2013
Female 2013
Male
2012
Female 2012
White versus Non-White
Percentage
42.05%
Male
2013
57.95%
Female 2013
42.02%
Male
2012
57.98%
Female 2012
Change Male
Change Female
White
Non-White
29.31%
70.69%
27.75%
72.25%
31.89%
68.11%
29.88%
70.12%
-9.58%
2.09%
-8.77%
1.24%
With respect to the division between Whites and non-Whites, it is pleasing to note that there has been an
increase in both male and female non-White employment in the sector. Non-White males in the industry
increased by 2.09%, as opposed to non-White females which increased by only 1.24%. These results would
have been much higher if the changes in the Indian and Coloured racial groups had not been as severely
negative.
40
35
30
25
20
15
10
5
0
African Disabled
Coloured
Disabled
Indian Disabled White Disabled Other Disabled
Figure 1-10: Disability by race in medium and large levy-paying employers (%) (WSP data 2014)
There are 1,194 disabled employees among medium and large employers – of these, 394 are African disabled (32.99%), 247
are Coloured disabled (20.68%), 100 are Indian disabled (8.37%), 449 are White disabled (37.43%), and 4 are Other disabled
Page 51
(0.33%).
90
80
70
60
50
40
30
20
10
0
African Disabled
Coloured
Disabled
Indian Disabled White Disabled Other Disabled
Figure 1-11: Disability by race in small levy-paying employers (%) (WSP data 2014)
Figure 1-: There are 68 employees who are disabled among small companies - of these 12 are African disabled
(17.64%), 1 is Coloured disabled (1.47%), 3 is Indian disabled (4.41%), 52 is White disabled (76.47%), and 0 is
Other disabled.
1.11
Professionalisation of the Insurance and Related-Services Sector
This section discusses the level of professionalisation in the insurance and related-services sector as well as the
role of the professional bodies and drivers of change that impact on professionals in the sector.
The level of qualification is an indicator of professionalisation within the insurance and related-services sector. A
large proportion of the professional employees are members of professional bodies. The professional bodies are
major role-players in this economic sector and contribute to the skills development and professionalisation of the
sector. Furthermore, qualifications, professional designations, and membership of professional associations are
interlinked and most of the professional bodies confer qualifications on their members that have been registered
on the NQF.
The current skills profile in the sector is continuing the trend of professionalisation. The drivers of change moving
towards 2020 firmly indicate that greater professional challenges will have to be addressed in terms of rapid
changes (such as regulation) that demand innovative solutions (PricewaterhouseCoopers, 2010).
For the INSETA 2013 WSP/Annual Training Report (ATR) submissions, employers are asked to prioritise the
areas shown in Table 8, below where it has a significant impact on their business. Based on the information
received from 155 large- and medium-sized employers sampled and registered with the INSETA, employers
shared the areas of concern shown in the table in order of priority. Most employers stated that Financial Advisory
and Intermediary Services (FAIS), is a major priority in their business, followed by Treating Customers Fairly
(TCF) and then National Health Insurance (NHI). Looking at Priority 2 as ranked by employers, TCF, followed by
the Consumer Protection Act (CPA) and Conflict of Interest (COI), are the second highest priority for business.
As a third priority, employers stated that COI, TCF, and the Personal Information Bill (PIB) are the main business
priorities. The INSETA will now have a good idea of priority areas to enable it to continue supporting
stakeholders in 2014 and beyond. It is interesting to note that these priorities have not changed from the results
presented in the 2012 SSP. However, other areas of concern that need to be watched are Solvency Asset
Management (SAM), as well as the PIB.
Page 52
Table 1-20: Business priorities for 2012 and 2013
Area of Priority 2012 – 2013
Counts
Priority 1
Priority 2
Priority 3
COI
CPA
FAIS
NHI
PIB
SAM
TCF
Area of Priority 2012 – 2013
Row Percentages
13
36
484
25
26
22
40
Priority 1
182
94
105
36
46
46
137
Priority 2
121
149
99
28
88
35
126
Priority 3
COI
CPA
FAIS
NHI
PIB
SAM
TCF
4%
13%
70%
28%
16%
21%
13%
58%
34%
15%
40%
29%
45%
45%
38%
53%
14%
31%
55%
34%
42%
Page 53
6.00%
13.33%
15.33%
24.00%
13.33%
16.66%
9.33%
2.00%
1=1
2 = 20
3 = 33
4 = 16
5 = 31
6 = 17
7 = 26
8=5
Conflict
of
Interest
(COI)
0.67%
13.42%
22.14%
10.73%
20.80%
11.40%
17.44%
3.35%
Financial
Advisory
Intermediary
Services Act
(FAIS)/Regulatory
Exams
1 = 70
2 = 17
3 = 11
4 = 17
5=5
6=7
7=6
8 = 16
46.97%
11.40%
7.38%
11.40%
3.35%
4.69%
4.02%
10.73%
1 = 20
2=4
3=3
4=6
5 = 13
6 = 17
7 = 16
8 = 70
National
Health
Insurance
(NHI)
13.42%
2.68%
2.01%
4.02%
8.72%
11.40%
10.73%
46.97%
1 = 20
2 = 39
3 = 21
4 = 25
5 = 24
6 = 11
7=5
8=4
Treating
Customers
Fairly
(TCF)
13.42%
27.46%
14.09%
16.77%
16.10%
7.38%
3.35%
2.68%
1=4
2 = 23
3 = 12
4 = 14
5 = 20
6 = 37
7 = 33
8=6
Financial
Service
Charter
(FSC)
2.68%
15.43%
8.05%
9.39%
13.42%
8.72%
22.14%
4.02%
1 = 12
2=7
3 = 19
4 = 13
5=9
6 = 19
7 = 31
8 = 39
Solvency
Asset
Management
(SAM)
8.05%
4.69%
12.75%
8.72%
6.04%
12.75%
20.80%
26.17%
nd
position, followed by Conflict of Interest
Information Bill (PIB), occupying the third position.
Page 54
(COI), ranked in the third position. For score 3, conflict of interest (COI) came in the 1 position, followed by the Consumer Protection Act (CPA), ranked in the 2nd position), followed by the Personal
st
(CPA), in the third position. For score 2, Treating Customers Fairly (TCF), is ranked in the 1 position, followed by Financial Service Charter (FSC), placed in the 2
st
in the 1st position, followed by National Health Insurance (NHI) and Treating Customers Fairly (TCF), placed in the 2nd position, (equal numbers and percentages) , followed by the Consumer Protection Act
Scores 1, 2, and 3, of this 8 point scale are used in this discussion. It can be seen from the above table that for score 1, the financial advisory intermediary services act (FAIS)/Regulatory Exams), is ranked
WSP data 2014
1=9
2 = 20
3 = 23
4 = 36
5 = 19
6 = 25
7 = 14
8=3
1 = 13
2 = 19
3 = 27
4 = 22
5 = 28
6 = 16
7 = 18
8=6
8.72%
12.75%
18.12%
14.76%
18.79%
10.73%
12.08%
4.02%
Personal
Information
Bill (POB)
Consumer
Protection
Act (CPA)
Table 1-21: Impact of legislation on your business
Table 1-22: Medium & Large Companies
Retrenched
Dismissed
Misconduct
414
863
No.
Resigned
No.
Deceased
11842
No.
Retired
102
NonRenewal of
Contract No.
Dismissed
Incapacity
No.
Dismissed NonCompliance
Regulatory
Exam (RE). No.
1136
201
35
288
Turnover Statistics from the 2014/2015 Workplace Skills Plan/Annual Training Report data
N=149 large and medium companies WSP data 2014
Among large & medium companies’ resignations by employees constituted the highest number of turnover
statistics, followed by non-renewal of contracts, employees dismissed for misconduct, those employees who are
retrenched, those who retired, those employees who are dismissed for incapacity, those employees who
became deceased, and finally, those who are dismissed because of non-compliance to regulatory exams.
Table 1-22: Small companies
Retrenched
Dismissed
Misconduct
178
65
No.
Resigned
753
No.
Deceased
No.
Retired
16
NonRenewal of
Contract No.
Dismissed
Incapacity
No.
Dismissed NonCompliance
Regulatory
Exam (RE). No.
39
10
7
36
N=444 small companies WSP data 2014
Among small companies, the number of employees who resigned constituted the highest number of turnover
statistics. This is followed people who are retrenched, employees who are dismissed for misconduct, employees
whose contracts are not renewed, employees who retired, employees who became deceased, employees who
are dismissed for incapacity, and finally, employees who are dismissed for non-compliance to regulatory exams.
Therefore, the turnover statistics presents in large/medium and small companies presents a different picture.
Non-renewal of employees is less significant in small companies compared to large/medium companies.
Table 1-22 shows that there is a very high number of resignations in the sector in the last financial year that is
also similar to the results presented in the previous SSP. Of the companies sampled, there are 935 (30% higher
than the 2012 results) retrenchments, 1 426 (10% lower than the 2012 statistics) dismissals and 11 898
resignations within the large, medium and small companies. The reason for concern at the retirement figures
(628) being so high, is that it raises the question of whether a transfer of knowledge had occurred before
retirement (note also that this number is double the 2012 number of 386). Further, research is warranted in
assessing whether employers have succession plans in place and programmes to transfer the knowledge to
other employees as stated previously in this SSP. The INSETA is aware of new and non-permanent staff
reported by the registered companies in the sector, which accounts for 7 159 new entrants in the 1 April 2011 to
31 March 2012 period. It is possible that some of the retrenched, dismissed or resigned employees outlined in
the table below form part of this pool. Further research will have to be commissioned to identify if any of these
people from large, medium, and small companies above are still in the sector with a different employer.
The table same table outlines the statistics with respect to retrenchments and dismissals on a subsector basis.
The first part of the table presents the count data for each of the subsectors. For each subsector, the counts are
broken down into various categories. The second half of the table then calculates on a percentage basis the
level to which the category contributes to the dismissals for that particular subsector (calculated on the row
total). In the latter half of the table, the top three contributors for each category are then also highlighted.
Page 55
Table 1-23: Organisational statistics from employers
1
2
3
4
5
6
7
8
1
2
3
4
5
6
7
8
Sector
Retrenched
Misconduct
Resigned
Deceased
Retired
NonRenewal
Incapacity
Noncompliance
(RE)
Total
Risk
management
Insurance &
pension funding
3
0
306
130
6
0
2 147
54
0
2
216
281
0
0
11
13
13
3 160
Life insurance
Health care
benefits
administration
Short-term
insurance
85
77
375
62
1 222
1 601
10
17
31
15
209
318
0
21
0
21
1 932
2 132
175
415
3 076
44
113
347
34
34
4 238
Funeral
insurance
Reinsurance
Activities
auxiliary to
financial
intermediation
Total
1
18
2
231
1
358
449
33
2 670
4
1
2
4
4
483
0
19
1
133
0
1 161
0
29
0
28
37
4 629
880
Sector
Retrenched
1 359
11 204
Misconduct
Resigned
148
510
2 320
101
100
Deceased
Retired
NonRenewal
Incapacity
Noncompliance
(RE)
16
622
Total
Risk
management
Insurance &
pension funding
27%
0%
10%
4%
55%
0%
0%
18%
0%
0%
100%
68%
2%
7%
9%
0%
0%
100%
Life insurance
Health care
benefits
administration
Short-term
insurance
4%
4%
19%
3%
63%
75%
1%
1%
2%
1%
11%
15%
0%
1%
0%
1%
100%
100%
4%
10%
73%
1%
3%
8%
1%
1%
100%
Funeral
insurance
Reinsurance
Activities
auxiliary to
financial
intermediation
Total
0%
4%
93%
1%
0%
0%
1%
1%
100%
5%
5%
3%
8%
89%
58%
0%
0%
3%
3%
0%
25%
0%
1%
0%
1%
100%
100%
5%
8%
67%
1%
3%
14%
1%
1%
100%
(Insurance Sector Education and Training Authority, 2013) Figure 1-10 shows that of the 155 companies
sampled, 89% reported an increase in productivity, whilst 11% reported a decrease in productivity. The
employers’ reasons are as follows:
Increase:
x
The impact of training can very often only be seen in its absence; however, the first line of impact for
training can be seen in the direct production results. Better executed training equates to better
workplace results. Well-trained staffs are more confident, which improves morale and is evidenced in
management reports.
x
x
Better qualification for the employee as well as the impact on the service to the client.
Productivity remained the same. Managers reported this and we have a performance appraisal
process. It could also be argued that experience is the biggest factor that drives performance.
Decrease:
x
Long-term view – increased productivity and individual capacity through the development of core
competencies and skills over the long term.
x
Short-term view – decrease in productivity due to time out of work to attend training, feedback from
business line management, increase in backlog data and the request for overtime in certain areas.
x
Industry competiveness is a challenge in our field. Competitors are everywhere poaching our
employees and it is difficult to source the right calibre of people.
Page 56
Table 1-24: Turnover statistics broken down by standard industrial classification codes
1
2
Sector
Retrenched
Misconduct
Resigned
Deceased
Retired
NonRenewal
Incapacity
Noncompliance
(RE)
Total
Risk management
Attrition Rate
percentage per
turnover category
Total no. of
employees in the
risk management
sic code category
520
Insurance & pension
funding
3
0.57%
0
0%
6
1.15%
0
0%
0
0%
2
0.38%
0
0
0
0
11
2.11%
306
130
2 147
54
216
281
13
13
3 160
Attrition rate
percentage per
turnover category
Total number of
employees in the
insurance
1.50%
0.63%
10.54%
0.26%
1.06%
1.38%
0.01%
0.01%
15.51%
85
0.98%
375
4.31%
1 222
14.00%
10
0.11%
31
0.35%
209
2.40%
0
0%
0
0%
1 932
22.21%
Health care benefits
administration
77
62
1 601
17
15
318
21
21
2 132
Attrition rate
percentage per
turnover category
Total number of
employees in the
health care
0.59%
0.48%
12.44%
0.13%
0.11%
2.47%
0.16%
0.16%
16.60%
175
0.76%
415
1.80%
3 076
13.35%
44
0.19%
113
0.49%
347
1.50%
34
0.14%
34
0.14%
4 238
18.40%
& pension fund
category 20,366
3
Life insurance
Attrition rate
percentage per
turnover category
Total number of
employees in the life
insurance category
8,697
4
5
benefits
administration
12,861
Attrition percentage
rate per turnover
category
Total number of
employees in the
short-term
insurance category
23,024
6
Funeral insurance
rate per turnover
category
Total number of
employees in the
Funeral
insurance category
4,960
1
0.02%
18
0.36%
449
9.05%
4
0.08%
1
0.02%
2
0.04%
4
0.08%
4
0.08%
483
9.73%
7
Reinsurance
rate per turnover
category
Total Number of
employees in the
Reinsurance
2
0.41%
1
0.20%
33
6.80%
0
0%
1
0.20%
0
0%
0
0%
0
0%
37
7.61%
category 486
Page 57
Table 1-24 (cont.): Turnover statistics broken down by standard industrial classification codes
8
Sector
Retrenched
Misconduct
Resigned
Deceased
Retired
NonRenewal
Incapacity
Noncompliance
(RE)
Total
Activities auxiliary to
financial
intermediation
rate per turnover
category
Total Number of
employees in the
Activities
231
358
2 670
19
133
1 161
29
28
4 629
0.50%
0.78%
5.82%
0.04%
0.28%
2.53%
0.06%
0.06%
10.09%
880
0.75%
1 359
1.16%
11 204
9.59%
148
0.12%
510
0.43%
2 320
1.98%
101
0.08%
100
0.08%
16 622
14.23%
auxiliary to financial
intermediation
category
45,865
Total
Percentage labour
turnover for a
single
HR turnover
category across all
sic codes
Total number of
employees over the
116,779
Sic code
categories
The above table presents the turnover statistics for employers broken down by standard industrial classification
codes. The difference between Table 1-23 and Table 1-24 is that Table 1-24 presents the attrition percentage
rate per turnover category. For risk management, resignations represent the highest turnover category, followed
by retrenchments and non-renewal of contracts. For insurance and pension funding, resignations represent the
highest turnover category, followed by retrenchments and non-renewal of contracts. For life insurance,
resignations represent the highest turnover category, followed by misconduct then by non-renewal of contracts.
For health care benefits administration, resignations represent the highest turnover category, followed by nonrenewal of contracts, followed by retrenchments. For short-term insurance, resignations represent the highest
turnover category, followed by misconduct then by non-renewal of contracts. For funeral insurance, resignations
represent the highest turnover category, followed by misconduct, and deceased and incapacity (deceased and
incapacity are on the same level). For reinsurance, resignations constitute the highest turnover category,
followed by retrenchments, followed by misconduct and retirement on the same level. For activities auxiliary to
financial intermediation, resignations constitute the highest turnover category, followed by misconduct, and then
by retrenchments. The percentage labour turnover for a single HR turnover category across all standard
industrial classification codes is resignations, followed by non-renewal of contracts, followed by misconduct,
followed by retrenchments, retirements, followed by deceased, followed by incapacity and then by noncompliance.
Figure 1-10: Measuring productivity in the sector
Figure 1-10 shows that of the 155 companies sampled, 89% reported an increase in productivity, whilst 11%
reported a decrease in productivity. The employers’ reasons are as follows:
Page 58
Increase:
x
The impact of training can very often only be seen in its absence; however, the first line of impact for training
can be seen in the direct production results. Better-executed training equates to better workplace results.
Well-trained staffs are more confident, which improves morale and is evidenced in management
reports.
x
x
Better qualification for the employee and the impact on the service to the client.
Productivity remained the same. Managers reported this and we have a performance appraisal
process. It could also be argued that experience is the biggest factor that drives performance.
Decrease:
x
Long-term view – increased productivity and individual capacity through the development of core
competencies and skills over the long term.
x
Short-term view – decrease in productivity due to time out of work to attend training, feedback from
business line management, increase in backlog data and the request for overtime in certain areas.
x
Industry competiveness is a challenge in our field. Competitors are everywhere poaching our
employees and it is difficult to source the right calibre of people.
140
120
100
80
Incr/Decr Product No.
60
Incr/Decr Perc
40
20
0
Incr/Decr
Incr/Decr
Product No. Product Perc. `
WSP data 2014
Figure 1-13: Measuring productivity in the sector
Of the 149 large and medium companies who responded 127 (85.23%) indicated that productivity had improved
in their organization and 22 (14.76% ) indicated that it had decreased.
1.12
Concluding Remarks
This chapter displays the insurance sector’s profile and the role of the INSETA and its partners within the sector.
Information is drawn on how the INSETA disburses its funds in terms of the Skills Development Levies Act. The
implications of the Skills Development Levies Act have been discussed with a comparative analysis between
previous and new levy percentages. The distribution of various grant percentages across various bodies and the
rationale for amending percentage grant allocations has been explained. It is contended that workplace skills
training, including small and micro-enterprise development, is more amenable to discretionary rather than
mandatory grant funding. Caution is expressed against not spending the bulk of the funds received.
The purpose of the SSP has been outlined here. This is from the point of skills needs and training planned by
the sector, which in turn establishes the industry dynamics of the insurance sector. The SSP provides
Page 59
information on immediate needs and future requirements, which in turn directs the strategic framework ensuring
that it is in line with national priorities.
There are different types of discretionary grant projects that range from funding windows to strategic projects to
joint ventures and strategic partnerships.
The most important new relationship within the ETQA division is the requirement to interact with, and cultivate
business-working relationships with the QCTO. The advent of the QCTO has necessitated that the INSETA
become a development quality partner for the development of its own insurance specific qualifications as well as
partner with other SETAs and insurance bodies in the development of shared occupational qualifications. The
ETQA division is also making efforts for one of its qualifications to achieve exemption against the Regulatory
Exam (RE) 2 regulation.
The relationship between the INSETA and the insurance and related-services sector is studied. This is looked at
from the perspective of the number of levy payers who are registered with SARS within the insurance sector.
The size of the employers is variable in range. The level of skills of employees is also outlined.
The profile of the insurance sector is looked at from the vantage points of a number of variables:
x
occupational category broken down by race within medium and large employers;
x
racial representation in the insurance sector dichotomised into Black versus White employees;
x
occupational category broken down by race within small employers;
x
list of levy and non-levy payers registered with the INSETA in the year 2012, according to the SIC code;
x
the number of employers per company size, viz: small, medium and large and the number of
employees within large, medium, and small employers in the year 2012.
The insurance subsectors and employers within the sector looked at this sector profile from the perspective of
various variables:
x
number of employers registered with the INSETA by the SIC code;
x
employee provincial spread over the nine provinces during 2012;
x
employee racial breakdown for 2013;
x
racial breakdown in the managers and professionals occupational categories for 2013;
x
age distribution of employees in relation to occupational categories for INSETA medium and large levypaying companies for the year 2013;
x
and employees broken down by gender within small, medium and large registered INSETA levy-paying
companies for the year 2013.
The incidence of disability broken down by race group is also looked at.
Professionalisation of the insurance and the related-services sector is measured in this chapter. This is looked at
from the perspective of the connection between possessing a degree; membership of a professional body and
the conferring of a professional designation. Dealing with increasing regulation requires professional people with
a professional approach.
Another measure that complements the above is the rank ordering of business priorities according to Priority 1 to
3. Business priorities ranged from the FAIS Act to COI.
Organisational statistics for employers for the year 2012 are broken down by the following variables:
retrenchments, dismissals, resignations, deceased, retirement, and non-renewal of contracts. This is done for
large and medium companies. The number of employees falling within each category is reported on. Another
indicator of professionalisation is a measure of productivity over the last financial year. The question is: “Has
productivity increased or decreased over the last financial year?” The following conclusions are drawn: better
training leads to increased productivity and improved service levels for the client.
Page 60
Finally, productivity is measured in the sector over the last financial year, and there is a substantial (89%)
increase reported by the 155 large and medium companies sampled. Various reasons are advanced for the
decrease (11%) in productivity, and this necessitates that core competencies be developed over the long-term.
Page 61
CHAPTER 2
Economic Outlook, Performance, and Drivers of Change
2.1
Introduction
This chapter outlines the economic outlook and performance of the South African insurance industry and the
related services, and presents a bigger picture in order to direct the remaining chapters of this Sector Skills Plan
(SSP). South Africa’s performance in relation to the insurance industry is discussed relative to the rest of the
African continent. The drivers of change are included for further perspective on the future landscape and the
skills development issues to be addressed.
South Africa is known for its well-developed and highly liberalised financial sector. Particularly, the insurance
industry of the country is the most developed in the entire African continent. South Africa accounts for the bulk of
Africa’s total insurance business, i.e. the lion’s
share at around 70%. In this way, it has
surpassed other African countries with a
collective share of merely 30% (RNCOS, 2011).
In South Africa, the insurance and relatedservices sector is regulated by the Financial
Services Board (FSB), which is an independent
institution established by a statute to oversee
the financial services industry in the country.
The
FSB lists 192 insurance companies
operating in South Africa, of which 81 offer life
insurance (BMI, 2011). All subsectors are
represented within life and non-life insurance.
The Association for Savings and Investment South Africa (ASISA) represents investment service providers; asset
managers; collective investment scheme managers; health care benefits; reinsurance; and funeral, auxiliary, and
investment service providers. The South African Insurance Association (SAIA) represents non-life insurers.
2.2
Impact of Structural Changes on Sector Skills Needs within the
Insurance Sector
Various forces in the external environment compel the industry to innovate, especially from a skills development
perspective. These forces include financial challenges, regulations, an ageing population, confidence in social
media, the threat of extreme events, the inter-relationships between industry and external risks, HIV/AIDS, dreaded
disease management and the need for Enterprise Risk Management (ERM).
In PWC’s Strategic and Emerging Issues in South Africa Insurance 2010 Survey report, it is indicated that the
growth of the South African Black middle class will also drive change in companies’ offerings. Several companies
indicated that they were formulating strategies to address this market segment more specifically
(PriceWaterhouseCoopers, 2010a:18).
The financial crisis and consumer-led conservatism give rise to increasing regulation. This has led to new
legislation coming into effect, viz. Treating Customers fairly.
Social media and technology involve several perspectives. Social media create broader networks and hardware and
software developments, and cause data to become actionable. Developing and emerging markets are becoming
increasingly connected; social media impact on the way insurance business is conducted and these are
increasingly used by insurance companies. Social networks will become the insurance agent and broker of the
future
Page 62
2.3
Global Insurance: Vast Potential
"Companies that want to lead the way in the insurance industry need to relook at their strategy and cost effective
business models, the flexibility of their portfolios and their innovation in value adding products. Emerging
markets, including Africa, are receiving increased attention as future industry investment destinations" (Rapson,
2013:13).
It is apparent that there are anomalies in the global insurance market, because of the financial crisis. A
dichotomous relationship is evident; on the one hand, there are low interest rates and poor investment returns
that impede growth and on the other hand, the demand for insurance products and services remains high.
South Africa is the leading insurance market in Africa and ranks as one of the world’s top 20 markets for both life
and non-life insurance (Swiss Re, 2012). The life and non-life markets will continue to hold their thirteenth and
nineteenth positions by 2020 (PricewaterhouseCoopers, 2012:9) and these findings confirm that South Africa
holds its own in relation to the global market. An article by Rapson outlines strategic steps for improving our
global ratings. These steps range from staying nimble amid risks and regulation to customer centricity (Rapson,
2013).
By
2050,
fast-growth
economies are projected to
account for 65% of the global
economy. In contrast, most
developed markets are still
struggling to recover after the
global recession. For many
businesses, their very survival
depends on pursuing a growth
agenda. This might include
expanding into new markets and sectors, finding new ways to innovate, or taking new approaches to talent.
However, there is one key question that must be answered: How can your insurance business make the most
of the many opportunities that exist? (Rapson, 2013).
Page 63
2.4
Employment in South Africa
The labour market has shown signs of improvement according to the 2012 budget review, with total
employment rising by 2.8% for the period December 2010 to December 2011. Job creation has been
concentrated in the formal private sector. The economy is projected to add 850 000 new jobs over the next
three years, with 80% of these in the private sector, which will lower the unemployment rate to about 23% in
2014. Most of these jobs are likely to be concentrated in services and construction because of steady growth
in the domestic demand and
infrastructure expenditure. A
pickup
in
residential
investment is expected during
the outer years of the forecast
(National Treasury, 2012:32).
Various forces in the external
environment
compel
the
industry to innovate, especially
from a skills development perspective. These forces include financial challenges, regulations, an ageing
population, confidence in social media, the threat of extreme events, the inter-relationships between industry
and external risks, HIV/AIDS, dreaded disease management, and the need for Enterprise Risk Management
(ERM). Based on various assumptions about the external environment that has an impact on skills
development, proactive solutions are required, such as the provision of applied case studies for learning.
2.5
Macro-Economic Outlook
Participants believe that the insurance industry is built on financial soundness and stability. There is a
consensus that the industry had successfully weathered the global economic cris and is well regulated and
governed. The overall insurance market is viewed as competitive, with a high degree of innovation and new
product design (PricewaterhouseCoopers, 2012).
According to Clive Booth, Chairperson of Allianz (UK), while it is hard to predict the future, it is necessary to
be adaptable because the accumulation of wealth is taking place on an unprecedented level. The foci need to
be on efficiency, effectiveness, and the reduction of red tape in the insurance industry to quantify commodity
insurance. He further emphasised the necessity to diversify risk (Booth, 2013).
Some themes affecting the insurance industry within the coming decade are:
x
Go east (India/China) as there are developments in the insurance industry in these countries
x
Urbanisation by 2050 since, with a population of 9 billion, 80 million will live in cities
x
Scarcity of resources such as water
x
Digitalisation with the impact of social media and 5% of the population will have access to emails
x
Changing ageing trends since a point will be reached where there will be 40 000 centenarians
(FIA Regional Conference, 2013)
Interesting demographic statistics include:
x
There are 1.1 billion people between the ages of 20 and 65 around the globe.
x
Government debt on a global basis stands at $32.26 trillion.
x
Overall, the world’s financial resources have weakened. Many governments are in debt and their
resilience is weakening.
x
More than 20% of private consumption by persons over the age of 60.
Page 64
(ISA, SAIA and FIA Conference, 2013)
The major drivers of revenue
growth for the next one to three
years, with 2012, as the starting
year, are identified in this section.
The level of expected economic
growth
for
the
insurance
and
broader financial sector for 2012 to
2014 looks promising based on
feedback from the 2012 budget
review.
In 2000, Africa’s gross domestic product (GDP) for long-term insurance is $587 billion. In 2012, it is estimated
to be just under $2 trillion and it is expected to grow in excess of $2.5 trillion in 2016. A growing youthful
population that is becoming increasingly urbanised and who have more discretionary income
(PricewaterhouseCoopers, 2012) fuels the GDP growth..
Page 65
Table 2-1: Biggest drivers of revenue growth for the next one to three years (starting at 2012)
Major Drivers of Revenue Growth
Percentage
Endorsement
by
Senior
Executives in the Insurance Industry
Organic growth
37%
Introduction of new products
32%
Price increases
31%
Acquisition or joint venture
27%
New distribution channels
24%
Increased cross-line sales
23%
New opportunities resulting from regulatory changes
23%
Expansion to new geographic markets
20%
Stricter underwriting guidelines
14%
(KPMG, 2012:9)
The table above indicates the major drivers of revenue growth as expressed by senior executives in the
insurance industry in descending order of importance. Increased cross-line sales and new opportunities
resulting from regulatory changes enjoy the same level of endorsement.
Page 66
2.6
Strengths, Weaknesses, Opportunities, and Threats and Risk Analysis
While the PricewaterhouseCoopers (PWC) report has provided various strengths and weaknesses of the
sector, it is interesting to note that ongoing research conducted by the Sector Education and Training
Authority’s (SETA’s) research unit has not only confirmed these findings, but has provided greater depth.
From the table below it is clear that while many of the strengths and weaknesses are similar, many others
have been identified. Also included here is a list of opportunities and threats facing the sector.
Table 2-2: Strengths, weaknesses, opportunities and threats analysis of the insurance sector
Strengths, Weaknesses, Opportunities, and Threats and Risk Analysis
Strengths
-
The industry has access to grants.
-
The growth & demand of the ownership.
Weaknesses
-
-
The mutuality & exclusiveness.
-
The industry is contributing to the growth of the economy & is
-
-
The complexity & sophistication of the sector.
There are not enough suitable occupational qualifications in the
insurance industry.
The financial strength of the product channel & the financial -
strength of product providers, instances, etc.
-
The industry is over regulated. e.g. Black brokers are falling
short in terms of the RE.
-
addressing unemployment.
-
The knowledge of funding by the smaller brokers. They do not
know how to access it or what it is.
There is stability.
The high turnover of our representatives is a concern.
The Department of Education is not as involved when
discussions take place in the NT & elsewhere.
-
We need to be more proactive in our discussions with our
policymakers.
-
The lack of education at entry level. Some do not have basic
computer skills, cannot speak fluently or lack the knowledge of
work readiness.
-
We do not have to train people, we need competent people.
There is not one qualification that makes a person actually
operational. Everyone has to do some programme in order to
be operational & be recruited.
-
Recruitment practices are not assertive enough in terms of
reaching our aims & objectives. It is very difficult, not because
we do not have the skills to recruit the right people but rather
because we cannot find the right people.
-
Poor public image of the profession.
-
Low involvement of BEE players.
-
Low level of consumer education, knowledge & poor business
practice sense within the broker industry in terms of how to run
a business as opposed to how to sell insurance.
-
Opportunities
-
Poor infrastructure.
Threats
Training or employing people who understand or could predict -
Competitiveness – duplication of trying to duplicate our
world events that affect the industry, World Trade Centre, etc.
business model.
(how to fix the industry).
-
The new legislation.
-
Pushing towards a greener industry.
-
Micro-insurance on an operative level.
-
Products are always changing. There needs to be training for -
Over regulating, rising costs, the ageing of participants & the
the small & medium sector.
problem of attracting new entrance into the profession.
-
Increase the Black graduates in terms of membership for our -
NHI & retirement reform projects, third party property,
company as well as recruitments for them.
marketers (which include call centre tellers), etc.
TCF is seen in a positive light. By serving clients better, we
instil trust.
-
Diversification of products & services.
-
Professionalise the sector, growth in developing markets &
TCF.
-
Share responsibility.
Page 67
Evolving regulations and changing marketplace dynamics have emphasised the need for companies to
implement a strong internal risk framework. When survey respondents are asked to identify any existing
challenges preventing the adoption of a formal risk policy, 34% cited culture and behaviour as a key
challenge, while 27% believe that process integration and operational efficiency pose significant obstacles
(KPMG, 2012:12). This report is drawn from the responses of 102 insurance executives from large, United
States-based companies. A summary of the survey follows in the following two tables.
Table 2-3: Challenges preventing the adoption of a formal risk policy
Challenges
Results
Culture & behaviour
Process
integration
34%
efficiency
of
27%
operations
Clearly defined roles & responsibilities
25%
Governance framework
19%
Shared resources across the organisation
12%
Don’t know
19%
Table 2-4: Key foci of the enterprise risk management programme
Key Foci
Results
Supporting business decisions
21%
Assessment of risk exposures
19%
Improve risk management processes
18%
Improve the risk management structure
16%
Technology
14%
Risk culture & training
12%
(KPMG, 2012:12)
2.7
Market Segmentation
The percentage split of the South African insurance market can be seen below between long-term (life)
insurance and non-life insurance. Long-term insurance is the largest segment of the South African insurance
market, accounting for 75.2% of the market’s overall gross premium income. Non-life insurance generated
the remaining 24.8% of the market (BMI, 2011).
Table 2-5: South African insurance market segmentation: percentage share
Category
Percentage Share
Life insurance
75.2%
Non-life insurance
24.8%
Total
100%
(BMI, 2011)
It can be seen from Table 2-5 that the South African insurance market is segmented.
2.8
Subsectors of the Insurance and Related-Services Industry
This section discusses the subsectors of the insurance industry and cross-sectoral issues. The subsectors
reviewed provide a more encompassing overview and perspective of the insurance and related-services
sector.
Dealing with short-term and long-term insurance in the subsectors, the 2012 survey on strategic and
emerging issues in South African insurance by PWC dealt with a number of important issues relevant to this
SSP. These are discussed in the following paragraphs.
Page 68
2.8.1 Short-Term Insurance
Employment in short-term companies is expected to increase between 2012 and 2015. It is also predicted
that the number of brokers and intermediaries would experience a decrease between 2012 and 2015. The
number of short-term policyholders is expected to increase in the same years.
The South African insurance industry has experienced considerable growth in recent years and has been
able to withstand adverse global economic conditions. Certain segments of the short-term insurance have
been identified as the fastest growing.
Table 2-6 on short-term companies ranging from branches to policyholders (millions) between 2012 and 2015
depicts the numerical and associated percentage change. The role players in the short-term insurance
subsector range from traditional insurers to reinsurers.
Product offerings in short-term insurance must change, because of demographic changes. Seven major
drivers of change within the short-term insurance are reported, ranging from consumerism to legislation.
There is, furthermore, a requirement for skills ranging from technical to actuarial and underwriting skills,
because of changes in the short-term insurance sector and the increase in the number of employees.
Table 2-6: Short-term insurance companies
2012
2015
Change
Percentage
change
Branches
179
162
17
9.5%
Brokers or intermediaries
15 847
14 408
1 439
9.1%
Full-time employees in SA
15 991
17 353
1 362
9.0%
9.6
12.7
3.1
32.3%
Policyholders (millions)
The short-term insurance subsector, which includes traditional insurers, cell captive insurers, direct insurers,
niche insurers and reinsurers, contributes significantly to the South African economy. It forms part of a robust
insurance market that has successfully weathered the global financial crisis. It is found that the four most
pressing issues faced by the sector are regulation, legislative change, reputation, and training and
recruitment in the distribution channels. The changing demographics in South Africa require that short-term
insurers introduce changes to product offerings that meet the needs of specific market segments, for example
more entry-level products and products that meet the needs of a growing Black middle class.
The major drivers of change in the short-term sector are:
x
Regulation and legislation through binder regulations;
x
Intermediary remuneration regulation;
x
SAM; and
x
A lack of understanding of the role and value of a broker.
Gross written premiums (GWPs), claims ratios, and acquisition cost ratios between 2010 and 2012 are
analysed in this section. The way direct marketing impacts on the acquisition cost ratio and the administrative
expense ratio is viewed in this section.
Key indicators – on an aggregated basis:
x
GWPs increased by 10%
x
Claims ratios deteriorated to 66%
x
Underwriting margin reduced to 4.6%
x
Investment returns increased by 37%
Page 69
x
International solvency margin of 43%
The year 2012 thus, once again, showed the importance of insurance in a world that is economically
challenged and where natural catastrophes have become regular headline news, both locally and
internationally. South Africa followed, almost exactly, the global underwriting trend in 2012. In a report, by
PWC, it is shown that South Africa’s underwriting trend is similar to the global underwriting trend. However,
the multi-million rand Gauteng hailstorms and the St Francis Bay fires significantly influence the fourth
quarter. These significant catastrophes adversely affected the underwriting margins of the local insurers. The
report further discusses the following factors: the underwriting margin achieved in 2012, the overall claims
ratio for 2012, and the industry’s capital adequacy position.
If one were to compare the underwriting margin achieved in 2011 of 9.3% to the 4.6% achieved in 2012, it
would support the hardening of the market. This has, been attributed largely to the significant catastrophe
losses suffered in 2012. In addition, motor lines remain by far the most significant line of business. A
significant component of the overall repair costs of vehicles relate to imported parts, and rand weakness that
is pushing up these costs.
The industry’s overall claims ratio increased to 66% (2011: 62%). In addition to the large catastrophe losses,
insurers have attributed this to the weaker rand in the second half of the year and a pickup in crime-related
claims.
In the current economic environment, firms, including insurers themselves, are therefore shifting their focus to
cost savings. Insurers should be aware of cost cutting activities by customers. This might increase their
exposure to risk where those who are insured reduce some of their risk management activities.
The industry’s capital adequacy position, calculated on the international solvency margin basis, reduced from
49% in 2011 to 43% in 2012 (PricewaterhouseCoopers, 2012).
2.8.1.1 Building a resilient short-term Sustainability: industry in South Africa
The short-term insurance industry enjoys a high level of significance in the South African economy. This is
confirmed by the involvement of various representatives, boards, and commissions in this industry. A
definition of sustainability in terms of the short-term insurance industry is given here. Environmental, Social
and Governance (ESG) risks are dealt with, for examples environmental risks (a company’s impact on the
environment); social risks (dual economies) and governance risks (image and reputation).
The significance of short-term insurance to the South African economy is supported by the participation of the
FSB representatives, National Treasury (NT) representatives, and the recent agreement of the National
Planning Commission to send a representative to the next forum meeting in November. The definition of
sustainability used by the forum is the ability of the short-term insurance industry to remain relevant, inspire
confidence in stakeholders and offer products and solutions in the South African market in such a way that it
promotes and does not harm its environment for customers.
The top 10 ESG risks are clustered in Table 2-7. The thinking that underpins the ESG risks is derived from
the SAIA and Financial Intermediaries Association (FIA) as part of a communications and awareness
campaign launched in October 2011.
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Table 2-7: Top 10 environmental, social and governance risks
Environmental Risks
Social Risks
Governance Risks
Managing companies’ impact on
Dual economies
Management information
Increased crime & corruption
Image & reputation
Lack of transformation
Legislative & regulatory capacity
the environment
Lack
of
investment
&
maintenance of infrastructure
No real market growth
Skills depth & shortage
Barriers to Growth
Table 2-8: Barriers to growth in the insurance sector
Types of Barriers
Percentage
Response
by
Senior
Insurance
Executives
Pricing pressures
47%
Regulatory & legislative pressure
47%
Risk management issues
20%
A lack of customer demand
20%
A lack of qualified workforce
16%
Increased taxation
11%
(KPMG, 2012:9)
Table 2-8 outlines the industry dynamics and it can be seen that the types of barriers that are an impediment
to growth, according to the percentage responses by senior insurance executives, are the following in
descending order of importance:
x
Pricing pressures
x
Regulatory and legislative pressure
x
Risk management issues
x
A lack of customer demand
x
A lack of qualified workforce
x
Increased taxation
Pricing pressures and regulatory and legislative pressures enjoy the same percentage respondent
endorsement. In addition, risk management issues and a lack of customer demand have identical percentage
endorsement by the respondents (KPMG, 2012:9).
2.8.2 Long-Term Insurance
Plans to increase the number of long-term insurance branches are getting underway. There are also plans to
increase the number of brokers and intermediaries. The long-term insurance industry in South Africa has
reacted well to adverse circumstances and it is expected that it will continue to show economic growth up to
2013.
This section reports on key indicators on an aggregated basis for the long-term insurance industry for five
major insurance companies. The factors affecting the external environment for the long-term insurance
industry discussed range from high volatility in global equity markets to regulatory changes that continue to
affect all insurance businesses. The following indicators are also discussed:
x
The embedded value of South African new business
x
Volumes of new business on a present value of new business
x
Margin of new business written
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2.8.2.1 Key Indicators on an Aggregated Basis Including International Financial Reporting
Standards
The study reported below is from the Fortune Favours the Brave Insurance Industry Analysis: South Africa
Analysis of Major South African Insurers’ Results for the Year Ended 31 December 2012 – March 2013.
These are aggregated findings from the following long-term insurers: Discovery, Liberty, MMI, Old Mutual and
Sanlam:
x
Group International Financial Reporting Standards (IFRS) earnings increased by 2% between 2011
and 2012
x
Group return on average equity improved by 19% between 2011 and 2012
x
Group embedded value profits up by 53% between 2011 and 2012
x
Value of new business written up by 27% for the years 2010 to 2012
x
Margin on new business improves to 3.2% for the years 2011 to 2012
x
The long-term insurers included in this publication increased group IFRS earnings by 2% in 2012
The long-term insurers reported stronger new business growth in the last quarter of the year. Taken together,
they increased the embedded value of South African new business written by 27% to R4.7 -billion. They are
also able to increase volumes of new business on a present value of new business premium basis by 7.4%,
marginally above inflation. The margin on new business written increased from 2.7% in 2011 to 3.2% in 2012,
supported by the lower risk discount rate used to discount the value of future profits.
Although Chief Executive Officers (CEOs) focused less in their result presentations on the impact that factors
in the external environment had on their businesses in 2012, these cannot be ignored:
x
Continued high volatility in global equity markets
x
European sovereign debt crisis
x
Subdued GDP growth
x
Strong local equity market performance in 2012
x
Significant reduction in long-term interest rates to the lowest level in many years
x
Sovereign debt downgrade
x
An increase in the trade deficit
x
Rand weakness
x
Pressure on consumer disposable income
x
Inflationary pressures on the economy
x
High levels of unemployment
x
Regulatory changes which continue to affect all insurance businesses.
The South African insurance industry showed a remarkable resilience to the economic turmoil of 2008 that
entangled most of the industries across the world. In fact, the long-term insurance sector of the country
continued the trend of growth during this adverse time and registered about 12.5% growth rate during 2010.
With continued high rates of crime and violence, the long-term insurance sector is expected to remain healthy
during the forecast period to 2013 (RNCOS, 2011).
The participants in the PWC (2012) study under review anticipate an employment growth rate between 2012
and 2015. Growth is expected in the number of policyholders during this period and expansion in the number
of branches from 2012 to 2013. In the same period, only a modest growth rate is expected in the number of
brokers or intermediaries. Between 2012 and 2015, long-term companies expect to increase their
employment growth rate at the same level as short-term companies. A study is made of the variables
between 2012 and 2015 in branches, brokers or intermediaries, full-time employees in South Africa, and
policyholders. The change and the percentage change are also calculated.
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Long-term insurers plan to increase their number of branches by just 3.2% over the next three years to 1 562
branches. They plan to increase the number of brokers and intermediaries by 36% from 37 840 to 51 540.
However, if one participant is removed from this calculation, the remainder of the group predicts an increase
of 9.8%. The participants employed 57 667 people in 2012 and anticipate an employment growth of 6.8% to
61 600 by 2015. This figure is higher than it is in 2010, because of two companies revising their 2010
estimates. Finally, the long-term participants project that policyholders will grow from 22.2 million in 2012 to
28.6 million in 2015. Long-term companies expect to expand their branches by 27% to over 1 600 by 2013.
They expect only a modest increase in the number of brokers or intermediaries to 42 400. The number of
employees in the long-term companies is expected to increase at a similar growth rate to the short-term
companies, although they employ three times as many people.
Table 2-9: Long-term insurance companies
2012
2015
Change
Percentage
Change
Branches
1 514
1 562
48
3.2%
Brokers or intermediaries
37 840
51 540
13 700
36.2%
Fulltime employees in SA
57 667
61 600
3 933
6.8%
PolicyholderPolicyholders
22.2
28.6
6.4
28.8%
(millions)
(PricewaterhouseCoopers, 2012)
It can be seen from Table 2-9 that all of the given variables show an increase between 2012 and 2015.
The most important changes taking place in the South African insurance market are:
x
Ever-changing regulatory and compliance requirements and the costs associated therewith; and
x
The worsening state of matric education in the South African environment.
2.8.2.2 Judging the Business through the Lens of Pillar III Reporting
The essence of Pillar III reporting is using regulatory data to report on performance. The view is that Solvency
II has adequately accommodated for this. Some insurers see further frailties to this and have gone as far as
using their own economic capital model. Other metrics are being used by some insurers to complement the
SAM data as it is argued that SAM data may not be used exclusively. Pillar III views insurers’ risk profiles in a
different light and SAM is viewed as a linking of three variables. A specific challenge of SAM is addressed.
Using regulatory driven data for performance analysis brings with it many challenges for which the proposed
Pillar III reporting, as currently proposed in Solvency II, is poorly prepared. Furthermore, for quite a few
insurers, particularly in the life insurance industry, SAM data may not be viewed as the right basis for
allocating capital or judging the performance of the business as some insurers are using their own economic
capital model. This is because SAM is designed to value the balance sheet of the insurer on an economic
basis. These insurers may look to augment SAM data with additional metrics, both internally and externally,
but this introduces a new set of issues. Whether management thinks SAM is a good approach or not, this
regime will introduce greater variability into capital. Another key area is the amount of capital to pay
dividends. SAM requires a regulatory reporting framework to be put in place. Aligning capital and risk will
assist in promoting the global insurance sector.
Pillar III will result in more detailed information about insurers’ risk profiles, and the management of these
profiles placed in the public domain.
The intention of SAM is to link performance, capital, and risk metrics.
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Table 2-10 Two polar positions
Two Polar Positions or a Hybrid View
You develop an alternative capital & risk framework
You use local regulatory approaches to assess capital & risk
What metrics will you use to judge capital & performance?
What metrics will you use to judge capital & performance?
What will be the challenges in fully embedding this within
How do you ensure the group is steered in a consistent way?
the business?
How do you link to measures of value & risk management as
Will SAM data be a “binding constraint” alongside other
appropriate?
regulatory or rating views?
What do you use the internal model for?
How will you reconcile the internal view with these binding
constraints?
How do you rationalise this to the outside world?
How do you persuade the market that this is a “real”
measure?
2.8.3 Health
Care
Benefits
There
is
a
pooling
of
healthier
and
sicker
persons,
which
prevents
those with poor health from
contributing in terms of their
health
status. There are
exclusionary
clauses
on
health insurance policies.
Implementation
of
the
National Health Insurance
(NHI) could have implications for the private sector. It may also affect tax rebates for private health insurance,
which might fall away. Health care in South Africa ranges from basic primary health care subsidised by the
state to highly specialised health services, which are available in the public and private sectors. A parallel
private and public system exists, with the public sector contributing the largest part (about 40%) to the health
insurance market, while the private sector is growing fast. The public sector is perceived to be lacking
resources, understaffed and overstretched by having to provide health care services to more than 84% of the
population. In contrast, about 80% of South African doctors work in the private sector, providing medical care
to the higher earners in South Africa, most of who are members of medical aid schemes.
Due to concerns in the health care subsector, the Minister of Finance, Pravin Gordhan, has gazetted the draft
Demarcation Regulations which seek to find a better balance between medical schemes and health
insurance products for public comment. The regulations also seek to address the risk of not understanding
the difference and purpose of health insurance products and medical aid schemes.
The purpose of health insurance products is to complement and top up the cover provided by a medical aid
scheme.
Further challenges facing the sector include stringent regulation, the planned NHI (refer to the Fact Box
above) and the complexities involved in modelling health insurance. Implementing the NHI scheme could
have serious implications for the private sector, as contributors to private medical schemes could now be
required to also contribute to the NHI, irrespective of whether they utilise its services or not. In light of this, the
private health sector will have to reposition itself in this respect. The most critical skills development in this
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sector typically consists of modelling and risk management expertise, marketing, management and
administration (National Treasury, 2012).
2.8.4 Retirement Funds and Pension Funds
The Old Mutual Savings Monitor (2013) shows that for people who do not save, pension funds are the
second most popular savings vehicles at 56%, after funeral policies (65%).The national savings rate,
including savings by the government, corporates and households, stands at around 16.7% of the GDP, with
households contributing only 1.5% of this total. The poor household savings rate, coupled with a lack of
preservation, presents a considerable challenge for the retirement funds industry (National Treasury, 2011).
Typically, incomes are low when people are young, higher in middle age and low again when individuals
retire and move out of the labour market. The life-cycle hypothesis predicts that the average tendency to
consume out of income is greater for both young and ageing individuals, since the young borrow against
future income (often to buy homes) and the old use accumulated savings to finance consumption, thus
reducing their pensions. Middle-aged people have a greater propensity to save and a lower propensity to
consume out of income.
Retirement funds are designed primarily to promote life-cycle savings and encourage individuals to save
while working to finance consumption after retirement.
It is currently permissible for South Africans to borrow from their retirement funds in order to purchase a
house and it is common for pension funds to provide life and disability protection to their members. There are
sound economic reasons for pension funds to be used in this way:
x
Economies of scale in administration
x
Group risk pooling that protects insurers against adverse selection
x
Positive externalities (benefit "spill-over" to a party that is not a part of the original transaction or
decision making process) associated with the presence of the employer.
Government views the main role of pension funds as making possible life-cycle savings to support
consumption in retirement. For instance, according to the 2011 Sanlam Benchmark Survey, 107 members
out of 152 (70%) who left retirement funds through resignation or retrenchment withdrew from retirement
funds, 9% preserved part of the benefit while taking the rest in cash and only 2% moved the benefit to the
prospective employer’s fund).
Retirement funds have various governance weaknesses associated with them. Other concerns are that
retirement fund fiduciaries (trustees and principal officers) are not professionals and therefore cannot
challenge expert advisors. Governance challenges need to be addressed. Transparency and the disclosure
of information are crucial factors in retirement funding. It is shown later in this document that overpopulated
retirement funds have negative consequences. There is also a lack of provision for retirement by a large
proportion of the South African population. The fact that post-retirement care provision is not adequately dealt
with, is also discussed below
While the South African retirement fund industry has various weaknesses in contrast to other countries,
South Africa’s retirement system has relative success as participation rates and contributions are high. The
quantity of the system’s assets under management is one of the highest relative to the GDP in the world.
(National Treasury, 2013)
The major challenges that face retirement funds locally and worldwide are:
x
The long-term nature of the contributions
x
Governance risks
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x
Low skills levels of fiduciaries
x
Transparency and disclosure
x
Increased costs
x
Low savings rates
The challenges facing retirement funds revolve around prudential concerns due to the long-term nature of the
contributions, the risk involved in meeting the promise of financial support in old age and the longevity of
those on retirement. In Defined Contribution (DC) schemes, where the investment and actuarial risk lie with
the member of the fund and not the employer, one has to guard against fraud and excessive risk-taking. In
Defined Benefit (DB) schemes, the investment and actuarial risk lies with the employer who requires a
matching of liabilities and assets (Redbook, 2010:49).
The fact that retirement fund fiduciaries are not professionals has led to a concern that these fiduciaries have
limited capacity to challenge the judgement and advice of expert advisors. Trustees who have a deeper
knowledge of cross-key issues related to retirement funds are more likely to be confident and prudent in the
management of their schemes. Sponsoring employers of retirement schemes have cited the lack of
resources (including skills) as well as weak local engagement as key governance challenges that require
redress (OECD, 2010:8).
Overpopulated retirement funds make supervision difficult and costly. The wide range and types of retirement
funds contribute towards the fragmentation of rules and supervision. The cost of doing business is ever
increasing and most of the employer’s contribution is usually spent on risk benefits. A smaller portion of the
total contribution is allocated to retirement savings. These issues affect significantly on the fund’s ability to
provide a decent pension at retirement.
2.8.5 Investment and Unit Trusts
Market volatility may influence fund performance. Skill development requirements in this sector range from
investment to Information Technology (IT) expertise. Because of the complexity of the market, specific types
of training are required for various categories of staff.
Unit trust funds or collective investment schemes pool investor funds in a portfolio that is managed by a
professional fund manager. The existence of these instruments creates value to investors by giving investors
access to a wide range of investments that would otherwise not be available to an individual investor. Some
other advantages of collective investment schemes generally include diversification, liquidity, accessibility,
flexibility, tax efficiency, transparency, long-term savings, and income provision. Investment and unit trusts
are not exclusively insurance-related concepts, although such arrangements often include certain guarantees
regarding the early death of the policyholder, bringing it into the fold of the insurance and related-services
sector.
.Core skills development requirements in this sector include investment expertise, marketing, administration,
and IT expertise. Due to the possibility of product complexity, training for marketers and administrative staff
as well as client training are necessary.
2.8.6 Funeral Insurance
Funeral cover falls under an area of Assistance Business, which also includes support for family and
education. Recently, it has become more competitive and has experienced more change. Almost 80% of
participants interviewed for the PWC report view it as intensively competitive. Some have indicated significant
or fundamental changes over the last year (PricewaterhouseCoopers, 2012).
The outcome of funeral insurance is death benefits under the amount specified; however, there is an
ambiguity about what exactly constitutes funeral insurance because it could refer to death cover in excess of
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this amount. Therefore, there could only be one product option or it could be one option out of a number of
different products offered. It could also be part of micro-insurance (MI) cover or form part of financial
intermediation.
Assistance business is defined in the Long-Term Insurance Act, 1998 (Act No. 52 of 1998) as “a policy other
than an annuity that offers death benefits under the amount specified” (Long-Term Insurance Act, 1998 [Act
No. 52 of 1998]). In some cases, funeral insurance is sold as the only product option (through insurers
registered to do funeral insurance only) while in other cases it may be just one product out of a number of
different insurance products offered.
2.8.7 Reinsurance and Alternate Risk Transfer
Reinsurance is a mechanism for managing risk where a reinsurance agreement is entered into. It details
when the reinsurer would pay the insurer’s losses. The insurer pays a premium to the reinsurer. South Africa
provides an attractive region for reinsurance, because rate changes are favourable to the international level.
Reinsurance is insurance that is purchased by an insurance company from a reinsurance company
(reinsurer) as a means of financial capacity. The reinsurer and the insurer enter into a reinsurance
agreement, which details the conditions upon which the reinsurer would pay the insurer’s losses. The
reinsurer is paid a reinsurance premium by the insurer and the insurer issues insurance policies to its own
policyholders.
South Africa is regarded as an attractive region for reinsurance business because of geographical
diversification for the main insurance markets, and lack of major catastrophes (Aon Benfield, 2011). As a
result, several international reinsurance companies participate in the South African reinsurance market.
Reinsurance and Alternative Risk Transfer (ART) products are readily available in South Africa. South African
catastrophe rates continue to be stable, with slight reductions, given the lack of catastrophe losses in the
market. Both excess of loss treaties and proportional reinsurance businesses have remained relatively stable.
2.8.8 Risk Management
The buzzword here is ERM, which has to do with the risk management of companies. There are many
advantages to applying proper risk management, which includes counter-party risks and getting to know your
client procedures. Cognisance also needs to be taken of the external climate for managing risk and the
recovering global economy.
The insurance industry makes use of risk management principles in managing their businesses as well as
advising their insurance clients. Insurance, in turn, is one of a few risk treatment methods used to manage or
mitigate a risk by providing financial indemnification or compensation should a loss occur.
Proper risk management should result in many advantages for an insurance company, including increased
stability of returns, consistent risk taxonomy, risk measurement and mitigation processes across the
institution. Several companies within the insurance sector have stated that they are putting increased
emphasis on risk management, paying close attention to counter-party risks, credit ratings and general antimoney-laundering procedures. There is also notable concern about the external climate, with firms
highlighting various macro-economic risks, including a potentially weak demand in Europe, overheating in
China, and the shape of the recovery in the United States (this took place prior to the earthquake in Japan).
Generally, the outlook is upbeat, with most companies believing that South Africa stood to benefit from a
recovering global economy (BMI, 2011).
Black Middle Class
The Black middle class presents a positive opportunity for the South African insurance industry; it grew
dramatically between 2008 and 2010. This phenomenon brings about skills implications for the insurance
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industry. There is also a need to train and recruit more Black professionals in the sector. Various specific
skills are required. High mortality rates reduce the availability of skilled labour in the sector. Due to this risk,
specific skills are required and these are outlined below.
In PWC’s Strategic and Emerging Issues in South Africa Insurance 2010 Survey report, it is indicated that the
growth of the South African Black middle class will also drive change in companies’ offerings. Several
companies indicated that they are formulating strategies to address this market segment more specifically
(PricewaterhouseCoopers, 2010a:18).
Based on these trends, there is an increasing need to train and recruit more Black professionals into the
sector and to provide training to existing Black insurance and related-services sector workers. The skills
concerned are marketing skills, and product and strategy development.
2.8.9 Regulation
It is vital that the South African financial system remains competitive and becomes safer through global best
practice and the consideration of local conditions. Senior executives found three issues that are most
pressing to them in 2010, and one of them is regulation. The financial crisis and consumer-led conservatism
give rise to increasing regulation.
Despite obvious challenges, 64% of respondents believe their company is at least somewhat prepared to
seize regulation opportunities because of public policy and regulatory reform. Meanwhile, 25% report being
very prepared and 8% reported being unprepared (KPMG, 2012:13).
Table 2-11: Ability to seize opportunities from regulatory change
Level
of
Ability
to
Seize
Percentage
Opportunity from Regulator
Somewhat prepared
64%
Very prepared
25%
Not prepared
8%
Unknown
3%
(KPMG, 2012:13)
Table 2-12: Types of regulatory changes impacting business the most
Types of Regulatory Changes
Percentage
Impacting Business the Most
Increased federal oversight
55%
Solvency modernisation initiatives
33%
32%
Convergence of insurance contracts
20%
Standards
19%
Consumer protections
18%
Group & cross-border supervision
7%
(KPMG, 2012:13)
It has become essential to listen to the regulators of the industry, since they have verbalised the greater
challenge that should be prepared for. In the publication, A Safer Financial Sector to Serve South Africa
Better, National Treasury (NT) makes the following significant statement:
“Given the need for higher economic growth and job creation, it is imperative to ensure that the South African
financial system remains competitive and that it is made safer through regulation that follows global best
practice, but bearing in mind the specific circumstances of our own economy” (National Treasury, 2011:36).
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It is therefore essential that a typical South African solution should be created amid the global pressures.
Increasing Regulation
It is argued that the South African insurance industry is becoming progressively more regulated. SAM and the
FAIS are only some regulatory mechanisms. There are also, inter alia, TCF, the G-20 requirements for
international regulation; MI; the Regulatory Exams(RE); the advent of the twin peaks model; and changes to
binder regulations.
Treating Customers Fairly Initiative
The FSB published TCF in 2010, a proposal to adopt a framework for tougher oversight of market conduct
(PricewaterhouseCoopers, 2012). It focuses on an outcomes-based approach, requiring firms to incorporate
the fair treatment of customers at all the stages of the product life cycle, including design, marketing, advice,
point of sale, and after sale. The initiative encourages firms to re-evaluate their company culture and to foster
the attitude of treating customers fairly. It is hoped that the initiative will lead to more optimal outcomes from
the perspective of the regulators, consumers and, ultimately, the firms.
The desired outcomes of the TCF initiative are the following:
x
Consumers should be confident that they are dealing with firms where fair treatment of customers is
central to corporate culture.
x
Products and services marketed and sold in the retail market should be designed to meet the needs
of identified consumers.
x
x
Advice should be suitable and take into account the consumer‘s circumstances.
Consumers must be provided with clear information and kept informed before, during and after the
point of sale.
x
Consumers should be sold products that perform as firms have led them to expect, within
reasonable limitations.
x
Consumers should not face unreasonable post-sale barriers imposed by firms to change products,
switch provider, submit claims, or complain.
TCF is an important step in strengthening market conduct objectives in the financial sector and will
complement the government’s broader objectives in this area.
2.8.10 Social Media and Technology
Social media and technology involve several perspectives. Social media create broader networks and
hardware and software developments, and cause data to become actionable. Developing and emerging
markets are becoming increasingly connected; social media impact on the manner insurance business is
conducted and these are increasingly used by insurance companies. Social networks will become the
insurance agent and broker of the future.
Social media have become increasingly important in the insurance industry, for these reasons:
x
The increasing adoption of social media is creating broader networks of like-minded affinity groups,
with broad implications for the design, manufacturing, marketing, pricing and servicing of insurance;
the industry could use these mechanisms as channels for consumer education and distribution.
x
Developments in hardware and software technologies are transforming “big data” into “actionable
insights” that will fundamentally change how insurers make decisions and manage risk.
x
The developed and emerging markets are becoming more interconnected and dependent on each
other, as an alternative method of communication with clients.
(PricewaterhouseCoopers, 2012)
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How is the Environmental Driver Relevant to the INSETA?
Various environmental issues influence the insurance industry. There are two types of companies and
individuals: those who invest in sustainable use of natural resources and those who ignore environmental
factors. The insurance industry has relationships with suppliers of green technology in order to reduce risk.
There is an increased emphasis on sustainability reporting and indexes. Environmental issues such as
climate change and associated natural disasters (such as floods, droughts, and wild fires) are vital
considerations to the insurance industry (Department of Environmental Affairs, July 2010).
Companies and individuals who invest in sustainable natural resource use (reduction in iste, pollution,
greenhouse emissions, and water and energy use) are likely to be more profitable and secure, particularly in
the long term. On the other hand, businesses and individuals who ignore environmental legislation, by-laws,
and guidelines, present a higher risk. The insurance industry can form partnerships with suppliers of green
technologies that save natural resources and reduce risks as well as research groups involved in forecasting
climate change trends and informing adaptation and mitigation measures.
Increasing numbers of organisations are also placing more focus on sustainability reporting and indexes, with
the public becoming more concerned with environmental risk, prediction and mitigation (Department of
Environmental Affairs, 2012).
2.10 Drivers of Change Towards 2020
Five drivers of change in the South African insurance industry today have been Identified
(PricewaterhouseCoopers, 2012). These range from regulatory and reporting changes to changing
demographics and urbanisation. The top three changes apply equally to the short-term and the long-term
industry. Other major changes that are identified in the South African insurance industry now range from
regulations to claims.
Respondents further say the following are currently the major changes taking place in the insurance market:
2.10.1Regulation
Participants in the PWC report (2012) cited a number of issues, including SAM, TCF, FAIS, and Binder
regulations.
2.10.2 Changes in the Insurers’ Business Models
This includes changes in distribution, with the continued expansion of direct channels and recognition of the
significance of these channels by established players such as Sanlam with MiWay and Old Mutual with
iWyze.
2.10.3 Intermediaries Shake-up
Major changes are expected in the future role of intermediaries. Shake-ups are expected across the board.
The rise of direct insurers, customer empowerment, price sensitivity, product changes, and new regulations
will fuel these changes. Consolidation has already occurred at the highest level with Alexander Forbes Risk
Services and Marsh.
2.10.4 Increased Focus on the Consumer
Although a consumerist trend has been underway for a number of years, it has moved up the agenda
because of the FAIS Code of Conduct and TCF regulations.
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2.10.5 More and New Entrants
More direct players are anticipated in addition to the increasing interest of retailers and mobile phone
companies.
2.10.6 Claims
A participant noted that there is a major focus in the industry on the procurement side of the business aimed
at reducing rising claim costs.
With the 2020 landscape broadly outlined, it is necessary to focus on specific drivers of change en route to
that year. Insurance is exposed to a variety of factors that are driving change in the sector; the sector is
service-oriented and is heavily dependent on the skills, knowledge, and the abilities of its employees.
2.11 Non-Sector-Specific Drivers of Change
Non-sector-specific drivers of change refer to macro-economic factors that have indirect effects on the
insurance industry in terms of skills development implications.
2.11.1 HIV/AIDS
HIV/AIDS increased steadily in South Africa between 2001 and 2011. The HIV/AIDS problem has led to a
redesigning of policies and procedures within the insurance industry. A greater focus on a healthier lifestyle
for employees is needed in
order to promote a productive
sector.
HIV/AIDS
national
is
high
on
the
as
well
as
the
INSETA agenda. The number
of persons infected with HIV
is on the rise (Statistics South
Africa,
2011).
The
total
number of persons living with
HIV in South Africa increased
from an estimated 4.21 million in 2001 to 5.38 million in 2011. In 2011, an estimated 10.6% of the total
population is HIV positive. The number of people in the working age group range is considerably higher,
which is a major concern.
The number of HIV-positive people in South Africa is among the highest in the world. The pandemic is
considered to be the most serious social, economic and humanitarian challenge of our time. It is affecting
negatively on South Africa’s population growth rate, which has been declining since the early 1990s and is
projected to continue to decline and even to turn negative by 2035. Life expectancy at birth declined between
2001 and 2005, but has since increased, partly due to the rollout of antiretroviral medication.
Page 81
20
18
Crudemortalityrate
16
14
12
Asian/Indian
10
Black/African
Coloured
8
White
6
4
2
0
1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040
Figure 2-1: HIV mortality rates
Mortality is higher in Black and White citizens (see Figure 2-1). Mortality in South Africa is exacerbated by
high crime rates, other health-related deaths and high accident rates. South Africa is plagued by a quadruple
burden of disease as classified by the Medical Research Council of South Africa: HIV/AIDS, other
communicable diseases such as tuberculosis and malaria, non-communicable diseases such as diabetes,
and obesity, and cardiovascular diseases. In addition, South Africans have to deal with a huge amount of
violence, trauma, and injury. Not only is HIV/AIDS increasing mortality, but it is also decreasing life
expectancy, particularly among Black people (Haldenwang, 2010:4).
2.11.2 Longevity
There are various alternative options available to employees who are approaching retirement age. An
increase in the traditional retirement age may sometimes be considered. Various factors may influence this
decision. High youth unemployment may also affect this decision.
People are living longer after retirement due to health improvements and better lifestyle choices. Table 2-13
sets out the life expectancy of South Africans from birth to age 100. The typical life expectancy of South
Africans older than 65 years for males is 77.5 years and for females 79.6 years. At age 70, the expectancy
for males and females is 80.4 and 81.9, respectively. It is thus likely that South Africans could spend anything
from 12 to 20 years and beyond in retirement. The likelihood of women participating in the labour market for
longer periods is much higher than for men. Many people spend more time preparing for work and in
retirement compared to the years that they actually work.
Longevity, coupled with inadequate retirement savings, high unemployment among youths and labour market
inflexibility, presents a number of challenges for those who would like to stop working as well as for those
who wish to continue working beyond the traditional retirement age. Employees who approach retirement age
may opt to leave formal employment for part-time employment, leave full-time jobs for transition jobs or leave
employment altogether due to disability. Employees could continue working by negotiating a downscaling of
role and responsibility or by fulfilling a mentorship role towards the end of their working lives. An increase in
the traditional retirement age is another possible solution. Although this might be acceptable to an employer,
the productivity of older workers, workplace design, flexible employment options, and the need for continuous
education will influence the eventual decision. This is especially true in South Africa, where the retirement
age is kept low due to the large number of youths who are unemployed. How sustainable this approach will
be in the end, due to the critical skills shortage, remains to be seen.
Page 82
Table 2-13: Life expectancy in South Africa by age
At
Male
Female
World Rank
M
F
50.1
48.3
176
180
57.9
57.9
183
187
58.2
58.3
184
188
58.4
58.6
184
189
58.8
59.1
184
189
59.6
60.9
184
188
60.7
64.1
184
185
62.6
67.9
184
180
64.9
70.7
184
167
67.5
72.5
178
164
70.1
74.2
169
156
72.5
76.0
153
146
75.1
77.8
143
136
77.5
79.6
128
127
80.4
81.9
112
114
83.2
84.4
101
100
86.6
87.8
79
77
90.1
91.1
70
56
93.8
94.6
56
42
97.8
98.2
46
37
102.0
102.3
58
33
birth
Age
5
Age
10
Age
15
Age
20
Age
25
Age
30
Age
35
Age
40
Age
45
Age
50
Age
55
Age
60
Age
65
Age
70
Age
75
Age
80
Age
85
Age
90
Age
95
Age
100
(FANews, 2013)
This table shows that at birth, life expectancy for males is 50.1 years and for females 48.3 years. These age
life expectancies are ranked 176 and 180 in the world, respectively. At age 100, life expectancy for males is
102.0 and for females 102.3. In this case, these life expectancies have a world ranking of 58 and 33,
respectively.
Page 83
2.11.3 Unemployment
The government’s objective
to
create
new
jobs
is
impeded by slow economic
recovery
and
requirements.
unemployment
regulatory
Levels
of
increased
from the fourth quarter of
2010 to the second quarter
of
2011.
Although
the
economy has recovered to
some
extent,
job
losses
continue. Two factors have
been identified as causing
youth unemployment.
Youth unemployment develops into adult unemployment. The government’s target to create 4.5 million job
opportunities by 2014 appears ambitious in the context of the sluggish economic recovery that South Africa is
likely to experience in coming years as well as the regulatory requirements of this industry. Data indicate that
the official unemployment level increased to 25.7% in the second quarter of 2011, up from 24% in the fourth
quarter of 2010, with the total number of unemployed people at 4.538 million in the quarter ending June 2011
(Statistics South Africa, 2011). This, especially in the light of regulatory and legislative changes that lead to
business mergers, has resulted in retrenchments in the industry (Statistics South Africa, 2012).
2.12 Sector-Specific Drivers of Change
Sector-specific drivers of change have direct consequences for insurance companies. Sector-specific drivers
of change refer to those factors that are directly related to, or occur in, the insurance and related-services
sector. As a result, these drivers of change have direct consequences for insurance companies and the
general financial landscape in terms of the implications for skills development.
2.12.1 Customer Behaviour
Changes and developments in technology have led to insurance consumers becoming more sophisticated,
which means that companies need to create new channels of distribution.
Growth in the insurance industry is accelerated by initiating awareness campaigns that inform the low-income
market. Both the FSB and the SAIA are involved in efforts to inform the lower end of the socioeconomic
market.
One of the ways to promote the industry’s growth is by launching awareness campaigns that seek to educate
and inform the low-income market, which has limited knowledge of the insurance and related-services sector.
The FSB currently has a consumer education department that facilitates projects of this kind. The SAIA is
also focusing on consumer education, which may facilitate the interest of lower-income earners or the
unemployed in pursuing learnerships in financial and insurance occupations.
2.12.2 Micro-Insurance
The question that is addressed in this section is what constitutes MI? The objectives of the National Treasury
policy framework for MI products are manifold and include the following:
x
Provision of access to insurance products to low-income households
Page 84
x
Formalise insurance provision by informal providers
x
Lower barriers to entry among potential service providers of these products
x
Increase consumer protection through business conduct regulation
x
Ensure relevant and sufficient enforcement.
The proposals suggested in the above policy framework assume a standalone act but with associated
qualifiers and range from levelling the playing fields for providers to more effective provision and
enforcement. The essence of these proposals revolves around the following:
x
Making the licence more accessible to more diverse groups;
x
Benefits are confined to risk products;
x
The size of benefits offered by micro-insurers is capped;
x
Micro-insurers will require less capital prudential requirements than short- and long-term insurers;
x
The FAIS legislation will be streamlined for the purpose of selling MI products;
x
Relevant MI products are matched to the needs of the consumer and their families; and
x
The current prudential and intermediation requirements are too complex in an innovative MI milieu.
The product features for MI products extend from risk only to further product standards. These features are
defined by the following main characteristics:
x
Risk and not savings elements to be included in MI products
x
All MI products are defined on a first loss and not on an indemnity basis;
x
DB caps for life asset and for all other insurance risk events. e.g. a legal policy;
x
An MI product contract term should be up to but not exceeding 12 months; where MI products are
underwritten on a group basis – individual policies should not be able to be selectively cancelled;
x
Initial prices and price changes must be signed off on an actuarial certificate;
x
The basis of underwriting can be on a group or individual basis;
x
Waiting periods must be introduced to obviate the risk of poor client selection – a waiting period
should not extend beyond six months (under certain circumstances a waiting period should not
apply when a policyholder moves from one insurer to another);
x
No exclusions on pre-existing conditions;
x
Policy documentation must be written in plain language;
x
Policy-in-kind benefits must be equivalent to the monetary benefit;
x
A specified time period is set within which insurance claims must be settled and according to
contract specifications;
x
Differing grace periods according to whether the policy has been in existence for a year or less;
x
There are no set prescriptions for the target market; and
x
Excess payments in the case of asset MI.
The results of the mean values in a study measuring the success of MI in South Africa (2013) are shown in
Table 2-14 per factor as identified by the conceptual model to measure business success in the MI industry of
South Africa.
Page 85
Table 2-14: Mean values of success influencing factors of business success
Factor Mean
Percentage
Trust
49.8%
Physical evidence
49.6%
Financial literacy
49.3%
People
49.2%
Communication
48.4%
Promotion
47.7%
Human resource training & development
47.7%
Technology
47.3%
Place
47.3%
Culture
47.2%
Measuring business success (general)
46.5%
Product
46.4%
Measuring business success over the past two
41.4%
years
Price
Micro-credit-MI link
Mean value of all influencing factors
28.2%
10.1%
43.75%
The mean values are summary mean values of the respective business success influencing factors of MI.
This means that the mean value of a factor portrays the calculated mean values of the respective measuring
criteria that pertain to that factor. The mean values in Table 2-14 portrayed a general dissatisfaction with
regard to the performance of business success in the MI industry. According to the mean values calculated
for the criteria, all of them are well below 60%. The criterion relating to price and the micro-credit-MI link has
even deteriorated to below 30%. This signified catastrophic failure in business success. Even more so, as
price is regarded to be one of the core marketing mix elements. Failure at one of these core elements
inevitably resulted in a breakdown of sales and resultantly there can be no business success. The results
signify that respondents are aware that reaching business success in the MI industry of South Africa is not
easily attainable and that the low-end market is not a lucrative insurance market. None of the criteria
achieved the highest merit of exceeding the 75% margin. Although the MI industry is still at its preliminary
stage of business development, respondents working for different insurance firms offering MI products and
services believe that business success in the MI industry is neither promising nor good in South Africa.
Page 86
2.12.3 Motor Insurance
Statistics reveal that a minority of the vehicles on South African roads are insured and that South Africans
pay the highest insurance premiums in the world. Interestingly, most insurance claims relate to motor
vehicles. Proposed interventions include making road safety education a part of the school curriculum. Other
initiatives to alleviate the high number of motor vehicle claims have been undertaken by Outsurance and Dial
Direct, viz. using Outsurance points men and the filling of potholes, respectively
Table 2-15: Causes of road crashes and associated percentages.
Causes of Road Crashes
Percentage
Road environment
10%
Vehicle
10%
Driver-caused crashes
80%
(Insurance Institute of South Africa, 2013)
The South African insurance and related-services industry is currently undergoing a crisis in motor vehicle
insurance. According to statistics revealed by the SAIA, of the approximately 9.5 million vehicles on the
roads, only 35% are insured. Furthermore, South Africa has one of the highest road accident rates in the
world, creating huge cost implications for both insurers and motorists. As a result, South Africans are
currently paying more for motor insurance than in any other country in the world. Claims for motor repairs due
to accident damage currently comprise 70% to 80% of claims.
According to Gary Ronald of the Insurance Institute of South Africa (IISA), in 2009, the total cost of motor
accidents to the South African economy is $16 billion; in 2010 it is $17.6 billion and $18.4 billion in 2011.
Police stations only record accidents where five or more people die.
As a result, SAIA is planning several interventions to try to alleviate the problem and to ensure more
affordable motor insurance. Some of the proposed interventions are:
x
To make driving skills and road safety part of the school curriculum;
x
Negotiating the cost and quality of motor spares; and
Page 87
x
Changing the qualification requirements of motor estimators and assessors.
Based on these interventions, the insurance and related-services sector is beginning to engage more closely
with the related problems and is devising new ways to curb claims.
2.12.4 Presidential Infrastructure Plan
The government recently adopted an infrastructure plan that is intended to transform the economic landscape
of South Africa, create a significant number of new jobs, strengthen the delivery of basic services to the
people of South Africa, and support the integration of African economies (Presidential Infrastructure Coordinating Commission, 2012).
There are a number of challenges facing the government, ranging from The New Growth Path, which sets out
to create five million new jobs by 2020, to poor co-ordination that slows projects and limits their impact. The
response by the government has been in terms of actions ranging from establishing a structure to address
the challenges through co-ordination, integration, and accelerated implementation. The Presidential
Infrastructure Co-ordinating Commission (PICC) will develop a 20-year planning framework beyond one
administration to avoid stop-start patterns. Some of the PICC terms of reference have value for the INSETA
projects: to identify five-year priorities; develop a 20-year project pipeline; develop objectives for skills,
localisation, empowerment, research and development; and address capacity constraints and improve coordination and integration.
Seventeen Strategic Integrated Projects (SIPs) have been developed and approved to support economic
development and address service delivery in the poorest provinces. Each SIP comprises a large number of
specific infrastructure components and programmes.
The INSETA cannot be a direct enabler in the broad domain of the SIPs because its functions fall outside the
scope for enablers, viz. major existing strategic projects, construction environment, transport, health and
water sectors, and rural access. The only area in which the INSETA can play a direct role is infrastructure
development for higher education. Here, the SIP can interact with the project plan for SETAs or public FET
collaboration and can establish SETA offices in Eastern Cape public FET colleges. There can be positive
spinoffs for both the interaction with the project plan and the establishment of the SETA offices (Presidential
Infrastructure Co-ordinating Commission, 2012).
2.13 Concluding Remarks
The South African short-term, medical, and long-term insurance and related-services industries have broadly
welcomed the proposed new regulatory capital requirements, although they are battling against them. There
is uncertainty about the costs of implementation, where players are in relation to the process of
implementation, and the features of the post-implementation landscape, which are particularly pertinent for
the health care sector.
As mentioned above, the financial services are facing challenges on a worldwide basis because of various
factors. Despite this, South Africa possesses a world-rated financial system. The country’s financial services
contribute greatly to the GDP. In addition to this, regulation represents a positive challenge, and protects
financial services and further adds confidence to these services. Governance is good in the financial services
sector, even more so when it comes to treating customers; however, regulatory uncertainty requires
innovative solutions. In addition to this, in order to create a sustainable environment, there must be reciprocal
trust between the financial sector and its clients. This development is further reinforced by the ASISA
development fund, which promotes consumer literacy. The sector must have confidence in its services and its
information technology goals (Ernest Kaplan, 2013).
Page 88
Savings products must be characterised by simplicity and enablement. There must be a better usage of
mobile technology and there must be a fair allocation of resources. Clients must be at the centre of the asset
management industry, where they receive real return on their investments. The South African consumer is
generally ill informed with annuities, value ads and the receiving of rebates, consumers focus on cost only
and neglect regulation, which they think, is the domain of the fiduciaries (Ernest Kaplan, 2013).
Since the publication of the previous SSP, data has been updated, but no major changes have occurred in
the economic outlook and performance of the insurance industry.
The INSETA has been an active innovator in assisting to alleviate unemployment in the insurance and
related-services sector. Initiatives aimed at developing historically disadvantaged people into specialised
positions, such as actuaries, will gain further momentum during this SSP planning period.
Considerable efforts are made to update the future landscape to 2020 and to update the drivers of change. It
is clear that the megatrends will force the industry to innovate, since concerns around cyber security threaten
the industry’s confidence to use this medium. Contradictions between global forces and the South African
policy landscape call for an innovative South African solution. Such considerations, among others, will inform
the INSETA’s strategic plans and other priorities and will form part of Chapter 5.
The insurance and related-services industry is becoming even more regulated and it is essential that the
industry stay abreast of further developments. The regulatory changes will remain a priority and the insurance
and related-services industry will have to adjust and be proactive. An ageing population will also require an
innovative approach.
A new force that has a major impact on the insurance and related-services industry, and which is never
reported on in previous SSPs, is the role and application of social networks. To remain competitive as trends
change, insurance companies should incorporate a social media and internet-based strategy in their overall
business strategy.
New skills in key areas in the drivers of change have been identified. The key findings of the 2020 landscape
and drivers of change are expressed in terms of key assumptions about the future. The impact on skills
development is assessed and solutions are proposed that will be further addressed in the strategy in Chapter
5.
This SSP is fully aligned with key policies such as the National Skills Development Strategy III (NSDS III), the
New Growth Path, the Skills Accords and the Presidential Outcomes. It is also informed by, inter alia, various
leading reports published by the World Economic Forum, KPMG, PWC and Statistics South Africa.
Finally, it can be concluded that, despite the challenges of abiding with the South African policy landscape
amid contradicting global forces, the insurance and related-services industry is well positioned and prepared
to address future skills development challenges. This chapter lays a solid foundation for the remaining
chapters, which will culminate in a realistic and challenging skills development strategy in Chapter 5.
Page 89
CHAPTER 3
Skills Supply and Demand in the Insurance and RelatedServices Industry
3.1
Introduction
According to stakeholder feedback from the
(INSETA), financial advisors are considered the
lifeblood of the insurance and related-services
industry. However, due to the maturity and
associated skills that financial advisors need to
have at their disposal, these advisors are in short
supply and the demand for candidates is growing,
based on their contribution to the industry.
In terms of the demand for actuaries, there are
contradicting statements from various sources.
Statements by some people indicate that there is a demand for them, while others disagree. The short-term
insurance market has indicated that they are in need of actuaries who understand the insurance business
and market and require interventions for up-skilling actuaries in technical insurance aspects. A high level of
proficiency in mathematics is required to qualify as an actuary. Some respondents noted the difficulty of
retaining actuaries due to high salary expectations. Due to the high-level of the technical skills required for
underwriting positions, this is an ageing job category, as people remain in these job roles for long periods.
However, the supply of technically qualified junior staff is severely lacking in this industry, according to
various industry experts consulted.
Other key occupational areas are discussed further in this chapter. These include external recruits for 2013
broken down by race group as well as a composite measure of Black versus White external recruits on a
percentage basis; the most popular skills training reported by medium and large companies in the insurance
sector for 2012 and 2013; and planned training versus actual training completed
3.2
The INSETA Sector Skills Plan Research Methods
According to Dr Blade Nzimande, Minister of Higher Education and Training, qualified graduates, diplomats
and certified persons find it difficult to transfer their acquired knowledge to the workplace. For this reason,
there is a need for work-integrated learning. Based on this ongoing challenge in the insurance sector and
employment industry in South Africa, this section reviews the types of research methods that have been used
in the development of the current Sector Skills Plan (SSP). These methods yield a picture of what the
anticipated skills demands will be in the future. The sources of data (ranging from the 2011 INSETA Annual
Training Report [ATR] data to the 2012 INSETA Workplace Skills Plan [WSP] data), key stakeholder
consultative meetings and the type of labour market information that it yields will be explained.
Multiple research methods are used, which involve a review of a combination of desktop empirical studies,
primary statistical analyses, and Stakeholder Consultation Validation exercises. Each method used is based
on the level of insight it provides to facilitate a comprehensive labour market analysis. A multi-method
approach is used to compensate for the limited amount of weak labour market data that is available on the
insurance and related-services sector.
Page 90
The INSETA WSP and ATR are the most comprehensive analyses currently available on the supply and
demand of skills and occupations in the financial services sector. The INSETA’s Scarce and Critical Skills
Report, which is based on the INSETA 2012 WSP and the INSETA ATR 2012, indicates the demand trends for
occupational categories over the next two years.
3.2.1 Supplementation of WSP data with other data
As can be seen from 3.2 above, the skills division at Inseta uses multiple sources of data, especially qualitative
data to complement the quantitative WSP/ATR data. These include key stakeholder meeting sessions, desktop
empirical studies, comments on the impact on training with stakeholder organizations, industry analysis versus
the Price Waterhouse Coopers 2012 study, skills shortages identified from the political, economic, social,
technological, environmental and legal analyses.
We also conducted one- on-one interviews were conducted with key insurance sector stakeholders in various
subsectors in order to corroborate the findings for this Sector Skills Plan (SSP) research. In the submissions,
employers were first asked whether they had tried to recruit new employees in the preceding year and if so,
whether they had difficulty in finding suitable candidates for the positions that they wanted to fill. Employers were
also asked to identify the specific occupations for which they could not find suitable candidates, the number of
positions they were trying to fill, and the reasons (in their opinion) why they could not find the right people.
A qualitative analysis of anticipated critical skills to 2020, was also prepared and presented. Critical focus areas
ranged from the green agenda to client centricity. Strengths, weaknesses, opportunities and threats (SWOT
analyses of the insurance sector) are regularly undertaken by Inseta.
3.3
The Supply of Skills
The analysis of the skills supply to this sector is confined to the following three components:
x
INSETA WSP data
x
INSETA ATR data
x
The number of learners who qualify with insurance-specific and insurance-related qualifications.
The WSP data inform the most recent or current skills complement of the sector, while the ATR data indicate
the specific training conducted on registered INSETA levy-paying company employers. Hence, the focus on
the skills supply is confined to the current skills complement of registered INSETA levy-paying employers.
Analysing the INSETA WSP and the INSETA ATR data, provides a more accurate determination of the
scarce and critical skills, as set out in the next chapter, by tracking skills training conducted (the supply) and
comparing it to the demand.
The number of learners who qualify with insurance-specific and insurance-related qualifications provides an
indication of how many workers and potential workers are available as new labour market entrants. Where
new entrants into the insurance labour market are concerned, the following two points are significant with
respect to the supply of skills:
x
The insurance and related-services sector relies on individuals who exit secondary school with
mathematical skills. Hence, the output of learners with mathematics as a Grade 12 subject is a
significant gatekeeper to individuals who can access careers in the insurance and related-services
sector. This issue is discussed in the non-sector-specific change driver section, under education.
x
Various business and financial qualifications can lead to a career in insurance; hence, the supply of
skills emerges from a variety of degrees and diplomas. At the same time, there is high competition
for these skills, as they are applicable to the financial services sector. This makes it very difficult to
predict which graduates would adopt careers in the insurance and related-services sector, as they
are equally employable in the broader financial services sector, for example as business analysts,
accountants, risk managers or actuaries. Therefore, an accurate determination of the supply of fresh
labour market entrants is difficult.
Because graduates can follow careers in the insurance or financial services sector – a fact that highlights an
important area for the INSETA intervention – the career guidance offered to secondary school learners and
entry-level university students focuses on careers in the insurance and related-services industry. Such
guidance must also be made attractive enough to motivate learners to pursue a career in insurance.
Page 91
The differing focus of the WSP and the ATR data is stressed concerning the three components used to
analyse skills supply in this chapter. The WSP data provide a picture of current skills needed by the sector,
where the training and up-skilling still needs to be carried out, while the ATR provides a description of training
needs one year prior to the current WSP submission, where the skills needs are identified and hopefully met.
Possession of matriculation mathematics by learners is advantageous because it leads to exemption from
unit standards that form part of the Financial and Advisory Intermediary Services (FAIS) requirements. In
addition, it provides a measure of the number of learners who can potentially access the insurance sector,
given that mathematics is compulsory for entrance into the insurance sector. The acquisition of insurancespecific qualifications provides a measure of the number of new entrants available to the insurance sector.
Because qualifications for both the insurance and the related financial services sector overlap, the number of
potential applicants available to the insurance sector is potentially diminished. The benefits for learners to
pursue careers in the insurance sector cannot be overemphasised.
3.3.1 Supply of Skills from Secondary Schools, and Further Education and Training
Institutions
The number of candidates enrolled for the National Senior Certificate (NSC) is discussed here. In addition,
the number of candidates who enrolled and wrote the NSC is compared and contrasted.
New entrants to the insurance sector generally need to have passed Grade 12.
The number of candidates who enrolled for and wrote the NSC examination in 2012 is 511 152. The number
of candidates between 2009 and 2012 on a full-time and part-time basis per province is highlighted in the
tables below. Illuminating comparisons can be made on the increase in numbers of learners who enrolled for
the NSC during this period.
(Department of Basic Education and Training, 2011)
Table 3-1: The number of candidates enrolled for the NSC examination from 2010 to 2012 (part-time and full-time)
per province
Province
Number of Candidates
2010
Eastern
Cape
Free State
Full
Part
Time
Time
2011
Total
Full
Part
Time
Time
2012
Total
Full
Part
Time
Time
Total
68
11
79
68
16
84
69
18
88
110
311
421
253
183
436
427
719
146
28
2 061
30
26
2 184
28
24
3 234
566
792
976
616
505
27
850
94
23
118
88
34
122
91
36
128
628
477
105
048
740
788
503
854
357
Kwa-Zulu
130
20
151
126
22
149
132
24
157
Natal
452
582
034
874
556
430
503
844
347
95
9 846
105
74
12
87
78
14
92
697
605
678
283
211
623
834
59
49
5 980
55
49
7 308
556
630
610
203
Gauteng
Limpopo
851
Mpumalanga
54
5 016
540
North West
29
2 679
586
Northern
Cape
Western
Cape
10
1 381
405
46
6 200
903
32
25
265
934
11
10
786
547
53
41
103
346
3 125
1 630
29
27
059
555
12
9 234
3 437
2 137
11
371
50
45
507
562
9 328
54
890
(Department of Basic Education, 2012)
The following highlights data from one small and two large provinces:
30
992
177
9 161
56
511
Page 92
x
In the Eastern Cape, the number of candidates who enrolled for the NSC between 2010 and 2011,
on a full-time basis, increased by 143. On a part-time basis for 2012, the number of learners
enrolled for the NSC examination increased by 7 408 from 2010.
x
In Gauteng, the number of full-time student candidates who enrolled for the NSC between 2010 and
2011 declined by 6 580. The number of learners enrolled on a part-time basis in 2012 increased by
13377 from 2010.
x
In the Western Cape, the number of full-time candidates who enrolled for the NSC between 2010
and 2011 decreased by 5 557. The number of candidates who enrolled for the same certificate in
2012, on a part-time basis, increased by 3 128 from 2010.
With the exception of the Eastern Cape and Northern Cape, the number of full-time learners enrolled declined
between 2010 and 2011; whereas between 2011 and 2012, the number increased for the other provinces,
with the exception of the Free State, Mpumalanga, and the Northern Cape. Interestingly, the number of
learners who enrolled on a part-time basis for the same period increased in all nine provinces. The trend may
be due to economic factors, for example, where learners register on a part-time basis while working at the
same time.
Two very important factors will determine entrance to a career in insurance:
x
Of these new labour market entrants, a limited number will be admitted to tertiary educational
institutions for further studies to qualify for working in the industry. For example, in 2009, of 334 718
candidates who passed the Grade 12 exams, only 19.9% are admitted into universities for various
degrees (South African Institute of Race Relations, 2010).
x
As stated earlier, a pass in mathematics is important.
Table 3-2: The number of full-time and part-time candidates who enrolled and wrote the 2012 NSC per province in
2012
Province
Number of Candidates enrolled
2012
Number enrolled
Number wrote
Difference
Enrolled-Wrote
Full Time
Eastern
69 427
Part Time
Full Time
18 719
63 989
Part Time
8 898
Full Time
Part Time
5 438
9 821
Cape
Free State
24 616
3 234
24 265
2 042
351
1 192
Gauteng
91 503
36 854
89 627
29 105
1 876
7 749
Kwa-Zulu
132 503
24 844
127 253
16 534
5 250
8 310
Natal
Limpopo
78 211
14 623
77 360
10 902
851
3 721
Mpumalanga
49 203
7 308
47 889
4 408
90
2 900
North West
27 555
3 437
27 174
2 629
381
808
Northern
9 234
2 137
8 925
1 110
309
1027
45 562
9 328
44 670
5 924
892
3 404
527 814
120 484
511 152
81 552
15 438
38 932
Cape
Western
Cape
National
(Department of Basic Education, 2012)
According to the data in the table above, the total number of candidates who enrolled for the NSC in 2012
(both full-time and part-time) is 648 298 and only 592 704 candidates wrote the final NSC exams. Therefore,
55 594 learners who enrolled did not write the final exams.
The following conclusions can be drawn from the tables above:
Page 93
x
A Grade 12 pass is a good indicator of the number of learners available to pursue studies in
insurance.
x
The number of learners that enrolled for a NSC between 2011 and 2012, on a full-time basis has
had a slight increase, with the exception of the Free State, Mpumalanga, and Northern Cape.
x
x
The number of learners who enrolled on a part-time basis increased between 2010 and 2012.
There is a difference between the number of learners who enrolled compared to the number of
learners who actually wrote the NSC exam in all of the provinces.
Stakeholders interviewed by the INSETA state that the supply of skills into the insurance sector through our
educational system is insufficient. This is perceived to be affecting largely entry-level business markets,
rather than upper markets, because upper-income markets aim to employ people with a university
qualification rather than people with only a matric. Respondents say that insurance organisations will mainly
look at employing people with at least a matric.
Further challenges are that the expectations of people entering the insurance sector are far different from the
reality, which results in many people exiting the sector before they have been in an insurance position for at
least one year. This prevents them from exploring other career opportunities within the insurance industry. In
Chapter 1, the INSETA provided data on current skills in the sector, which showed that there is a high
number of youths in the sales workers category. Because a sales position is demanding and commissiondriven, there is a huge attrition rate with people leaving the position shortly after commencing employment.
Generally, matriculates do not show the necessary mathematical and communication ability or work ethic
required for business. This is a major concern for all stakeholders that are interviewed.
3.3.1.1 A New Alternative to a South African Matric
There is now a credible alternative to the traditional matric exemption for learners within South Africa. With
the approval of Higher Education South Africa (HESA), a student can now achieve a foreign exemption by
completing two qualifications:
x
A Business and Technology Education Council (BTEC) National Diploma
x
An English Language International GCSE (Level A-C)
The BTEC National Diplomas are available in industry niches from business to sport. The English Language
GCSE enables learners to develop their skills in three different areas. A British-based organisation is
responsible for awarding the two above-mentioned qualifications.
The benefits of completing these two qualifications are three-fold:
x
With only 26.6% of the 2012 matriculates achieving a matriculation exemption, this will be
welcoming news for school leavers wanting to pursue a vocational route. These diplomas are
available across most industries from business to hospitality, art and design, Information Technology
(IT), and tourism and sport.
x
Meanwhile, the International GCSE English Language enables students to develop their
understanding of the spoken word and the capacity to participate effectively in a variety of speaking
and listening activities. Edexcel, the United Kingdom awarding body awards both the BTEC and
English qualifications (McGill Edexcel, Southern Africa, March 2013).
x
Once students complete a BTEC National Diploma and English Language qualification (Level A-C),
they will achieve a South African foreign matric exemption and an international Edexcel qualification,
and will gain the skills necessary to find a job.
Page 94
3.3.2 Supply of Skills from Tertiary Institutions
The 2011 preliminary student head count for the 23 universities is 899 120, which includes both full-time and
part-time enrolments for contact and distance study. Of the distance education students, 83% are at the
University of South Africa (UNISA) (Department of Education and Training, 2012).
In 2009, some 82% of the total headcount of those enrolled are at undergraduate level, while 5% are
master’s students and 1% learners are doctoral students. Redress policies seeking better access for Blacks
and women have clearly worked. In 1994, 55% of students at public universities are Black (African, Coloured
and Indian), 43% of them African and 55% are male. By 2010, these figures are 80% Black, 67% African, and
43% male. While the number of Africans has increased substantially, the level is still smaller than the
proportion of Africans in the population. The proportion of males, however, has decreased dramatically and
must be a cause for concern if the trend continues. Note, however, that only 60% of graduates are African,
although Africans constituted 67% of all students. This higher dropout rate and poorer academic performance
is due, at least in part, to the lower quality of schooling in townships and predominantly African rural areas
(Department of Education and Training, 2012).
The tertiary institutions supply newly skilled labour market entrants who have passed insurance-related
qualifications. The areas of study range from accounting to insurance and risk management. Head count
enrolments for the field of Science, Engineering, and Technology have grown by 4.4% per annum between
2000 and 2009. Graduation rates in these areas have grown by 5.5% per annum, which indicates improving
throughput rates (Department of Education and Training, 2012).
Other problems aggravate low throughput. University funding has not kept pace with enrolment growth.
Anecdotal evidence indicates that the financial problems facing many students may be a contributing factor to
the high dropout rates. A detailed research study to verify this is, however, yet to be undertaken. In addition,
there are resource constraints in many of the historically Black universities. Many of them do not have
adequately resourced libraries and laboratories and have oversized classes (Department of Education and
Training, 2012).
Success rates are also negatively influenced by poor living conditions due to the poor quality of residences
both on and off campus. Furthermore, student support services are often not well integrated across the
academic and administrative functions. The improvement of existing student accommodation and the
provision of additional accommodation have been prioritised by the DHET. Furthermore, the DHET has
commissioned a task team to look into the conditions of student accommodation facilities and their findings
will soon be released. Additional concerns relate to the poor nutritional value of the meals provided and the
fact that, in many cases, the provision of a food allowance to students is not always appropriate as it is often
spent on goods other than food. Anecdotal evidence of hunger among poorer students abounds (Department
of Education and Training, 2012).
In order to ensure that quality education is an important part of our drive to create high quality universities,
our institutions must be given essential academic infrastructure, including laboratories, IT systems,
accommodation, classrooms and lecture theatres, libraries, and other facilities. Though the last five years
have seen a large financial injection into the sector, it has not adequately addressed the backlogs. The DHET
will, however, develop standards for equitable infrastructure to ensure that teaching and learning
environments are broadly equivalent across the country, with due regard to each university’s needs. Once
such a standard has been set and approved, the DHET will develop a plan on how to achieve this. The
priority at this stage will be given to upgrading infrastructure and facilities at poorer universities, so as to get
them up to agreed standards. In particular, there is a need to strengthen internet access and to ensure that
sufficient connectivity is available at more disadvantaged institutions (Department of Education and Training,
2012).
Page 95
The Ministry has allocated considerable funds for infrastructure projects at universities. The model of funding
used is a partnership between the institution and the DHET in terms of contributions. The DHET will consider
the development of an Education Investment Fund, which would have a pool of funds available to deal with
the growing need for upgrading and refurbishment. Priority will be given to partnerships with public finance
institutions and, where necessary, the private sector as well. The DHET must work in close co-operation with
the National Research Foundation (NRF) and with universities to address the rising costs of providing
journals and other library material. It is recognised that knowledge resources have to be acquired equitably
for all universities and that a shared cost model will alleviate pressure on funds. The cost-saving potential of
central procurement of electronic journals for all institutions will be investigated. In addition, the DHET must
explore ways and means to establish a state-led publishing house in order to address the need for more
affordable and efficient production of learning materials (Department of Education and Training, 2012).
The last decade has seen numerous changes to the university landscape. Firstly, there has been the
development of new institutional types, as the result of a series of mergers and incorporations. South Africa
now has 23 public universities. These comprise 11 universities (in the traditional sense), six universities of
technology (previously known as technikons) and six comprehensive universities (combining the functions of
traditional universities and universities of technology) (Green Paper on Post Schooling, 2012).
The 11 traditional universities offer various formative and professional bachelor’s degrees as well as a small
number of diplomas and certificates at undergraduate level. Postgraduate provision consists of honours,
masters and doctoral degrees as well as a limited number of postgraduate diplomas and certificates.
The universities of technology offer a number of undergraduate diplomas that are vocationally orientated as
well as a Bachelor of Technology degree. Postgraduate provision at universities of technology is limited to a
relatively small number of masters and doctoral programmes. Comprehensive universities offer a
combination of traditional university and university of technology programmes.
Over and above the 23 public universities, there are two institutions in the Northern Cape and Mpumalanga,
which serve as administrative hubs co-ordinating the provision of higher education through partnerships with
universities elsewhere. A decision by the Department of Higher Education and Training (DHET) has been
made that these institutes will become universities.
3.3.2.1 Research and Innovation
There are outputs that are used to meet the objective of the Medium Term Strategic Framework (MTSF).
These range from increasing research to more investment into research development and innovation. The
strategy of the DHET is reflected in its commitment to long-term research that is transformational in nature.
This emphasis on a new slant to research requires working with new and varied partners, specifically the
Department of Science and Technology, so that a more stable funding model for research can be found and
the number of patents and products can be increased. This will help achieve the objectives of the New
Growth Path (NGP) and Industrial Policy Action II. Occupationally Directed Skills Supply to the Insurance and
Related-Services Sector
The INSETA provides funding for internship and learnership programmes to be run in the sector to assist
unemployed people to obtain industry-related qualifications and work-based experience. This is with the aim
of placing them in a better position to gain full-time employment. Figure 3-1 and Figure 3-2 highlight external
recruits (people temporarily employed) in the sector for the period of 2013.
Page 96
External Recruits 2013
2000
1800
1734
1600
1400
1223
1200
Male
1000
Female
800
600
400
283
157 185
200
174
99 136
9
3
4
0
African
Coloured
Indian
White
Other
Foreign
Figure 3-1: External recruits
Figure 3-1 shows that of the 4 007 external recruits, most are African females and males. The second largest
pools of external recruits are White females and males. It is pleasing to note that the number of external
recruits has increased substantially from 2 328 in the previous financial year to the current 4 007.
Representation 2013
White
Black
11%
89%
Figure 3-2: External Black versus White recruits represented
In 2013, 89% of external recruits are Blacks compared to 11% Whites. This augurs well with regard to the
sector’s transformational efforts and it is positive to note that the number of Black recruits proportionally has
also increased from 78% in 2012 to the current level of 89%.
3.3.3 Supply of Skills from the INSETA Education Training and Quality Assurance
The figures in Table 3-3 reflect the number of learnership, qualification, and unit standard achievements for
the INSETA, as at August 2013. The learners are funded through the INSETA, employers or other means.
Table 3-3: The INSETA's total submissions to the National Learner Record Database (NLRD) as at August 2013 since
the inception of the INSETA
Page 97
2013 Data Records on NLRD
Number of Learners
Uploads
Learnership achievements
8 504
Qualification achievements
32 420
Unit standard achievements
2727 376
The INSETA saw an increase in the number of learners qualifying in learnerships, internships, and unit
standards. The period also saw an increase in the number of learnerships completed on time and a decrease
in the dropout rate of learners. There is also a continuation of the highly successful partnership between the
INSETA and the South African Actuaries Development Programme (SAADP) that provides financial and
motivation support to high-potential university students from disadvantaged communities to gain their
actuarial science qualifications. This project has been inspired by the shortages of actuaries in the economy.
3.3.3.1 Learnerships
Learnerships are selected by companies in order to address scarce skills identified in the sector and are in
line with business needs and imperatives. Companies hosted learners in Gauteng, Western Cape, KwaZuluNatal, and Eastern Cape. Funding allocated for these learnerships amounted to R 30.7-million. The
learnership recruitment figures are as follows:
x
57 companies hosted learners in insurance-specific and cross-sectoral learnerships
x
350 employed learners
x
739 unemployed learners
x
108 disabled unemployed learners.
The INSETA is in the process of consolidating achievements in the above learners, which will feature in the
next SSP report.
From the learnership intake for 2011 to 2012 (Table 3-4), 20 learners terminated their learnerships before
completion, most of whom did so because they are offered employment elsewhere. Learners who terminated
recorded the challenge of meeting work-related targets whilst learning at the same time as the main reason
for terminating.
Table 3-4: Learnership intake for 2011-2012
Learner Agreement Status
Number
of
Learners
Completed
343
Registered
263
Terminated before completion
Total
20
626
In Table 3-4, the learning division approved 626 learners on learnerships. Whilst 343 learners completed
them, and are certified, an astounding 263 learners remained at a registered status due to learnerships
running across financial years. The reasons for companies not taking up the learnerships varied, but one is
the inability to recruit the right learners with the right qualifying criteria for the programme. Another reason is
that small companies could not manage the administration involved with the successful running of
learnerships. Every learnership that is taken up by employers has its challenges and many who take on
learnerships for the first time do not understand the implications of having an additional person in the
workplace. Some learners also find that this is not really the right sector for them and then resign from the
programme, whilst others are delayed from completing the programme due to issues like pregnancy,
personal matters, and the completion of exams in other programmes. Fewer accredited providers in all
Page 98
provinces offering insurance-related qualifications has also been a major contributor to less training taking
place in other provinces. Most providers that are based in the major centres end up travelling to the other
provinces to conduct training at a higher cost.
In order for the INSETA to ensure a higher success rate in learnerships, assistance is required in the
following areas:
x
x
Assisting employers to find the right talent.
Assisting small employers to manage the administration of learnerships through outsourcing this
function to a company contracted by the INSETA via a competitive tender process.
x
x
Ensuring that the INSETA is supporting insurance and related-service sector employers only.
Increasing internal administrative support through regional advisors for the INSETA to ensure that
learnerships are opened and closed on time.
Ensuring that new learnerships only open once old ones have closed.
Because public Further Education and Training (FET) colleges have a national presence, fostering
partnerships with them will ensure higher numbers of learners taken up in learnerships.
Page 99
Table 3-5: Learners in learnerships by province in 2012
Province
Number of Learners
Gauteng
306
Eastern Cape
30
Free State
5
KwaZulu-Natal
97
Limpopo
6
Mpumalanga
2
North West
4
Northern Cape
1
Western Cape
175
National Total
626
As expected, Table 3-5 indicates that most learners are from the major regions of Gauteng, Western Cape
and KwaZulu-Natal. If the INSETA is to grow the percentage of learner interests in learnership programmes
across the country, then it needs to get more employer involvement and commitment towards running these
programmes. The Eastern Cape region has become more active over the past year in taking on learners in
learnerships. The INSETA has been active in running road shows, mostly covering the major areas and the
Eastern Cape over the past year, which has been attributed to the increase in employer participation. The
only time the INSETA will be able to increase the number of learners in learnerships in the remaining
provinces is when there is more employer participation in these provinces.
The INSETA has made great strides in growing its provincial presence. In July 2011, the INSETA recruited 12
regional representatives to begin building relationships with employers across the country. In 2012, the
INSETA has seen an increased number of calls coming through the INSETA call centre, enquiring about
areas such as learnerships, bursaries, and internships from all the provinces.
18%
African
46%
8%
Coloured
Indian
White
28%
Figure 3-3: Learners in learnerships by race in 2012
Figure 3-3 above shows that in terms of the race breakdown of learners in learnerships, most learners are
Africans, followed by Coloureds, Whites, and Indians.
Page 100
37%
Females
Males
63%
Figure 3-4: Learners in learnerships by gender for the 2011 to 2012 financial year
Figure 3-4 shows that in terms of gender, more females applied for learnerships than males in the 2011 to
2012 financial year.
3.3.3.2 Internship Project
An amount of R18.7 million is allocated to this project. Some 275 interns are hosted in 58 companies in
Gauteng, Free State, Western Cape, KwaZulu-Natal, and Eastern Cape. The INSETA also allocated
R1.2 million to a special project targeting 10 people with intellectual disabilities. These people are to be
hosted in internships in companies in the insurance sector in order to help them find employment. Most
internships are run in Gauteng.
20%
22%
EasternCape
0%
FreeState
3%
Gauteng
KwaZuluNatal
WesternCape
55%
Figure 3-5: Internship spread per province in 2012
The internships are run on an annual basis. There are 302 registered internships and 36 have been
completed to date. The remaining internships are completed in four months following this year.
3.3.4 Training Interventions for the Supply of Skills into the Insurance Sector and its
Impact
The focus here is on annual training report data for the period 2011 to 2012. The purpose of discretionary
funding for meeting skills gaps is explained. The ATR analysis informs the specific skills that are the focus of
employer training interventions between April 2011 and March 2012. The INSETA uses discretionary grant
funding to address the skills gaps identified in the SSP for the insurance and related-services industry by
means of learnerships, internships, and up-skilling of currently employed people.
Page 101
An employer survey in the June 2012 WSP and ATR reports requested employers to measure the impact of
training on the organisation. In summary, all companies believed that training had a positive impact on their
organisation. The following (quoted) feedback is received:
Table 3-6: Comments on the impact of training on the organisation
Comments received
The impact of training can very often only be seen in its absence; however, the first line of impact for training can be seen
in the direct production results. More well executed training equates to better workplace results. Well-trained staff are more
confident which improves the morale and can be seen in management reports.
Better qualifications for the employees as well as the impact on the service to clients.
Sales targets are met & client relationships are maintained.
Due to the official training, new employees are brought onto par very quickly & they start working very productively within
three weeks. If there are any challenges with individuals, this is identified early & addressed accordingly as soon as
possible. Due to the fact that regular audits are done, it points out areas for retraining.
Growth in sales & revenue.
Our efficiency ratios have improved. Our backlogs are not substantial.
The use of a well-designed ROI tool assists in measuring this impact.
We have put very effective systems in place which monitor productivity levels – they have been very effective & very
successful.
Sales figures have increased steadily over the last year even though attrition has increased. We have changed our
commission structure which means that agents have to be more productive in order to earn. We have entered a phase of
rapid growth which has increased the need for staff across all areas of the business to deal with extra demand. There is a
higher level of output across all business areas. The result of this is the need for more training, from leadership &
compliance to computer & technical skills.
Post-record earnings indicate that productivity & service delivery continue to improve in the organisation. This shows that
the process followed to identify skills gaps & training needs is working effectively. In addition, learning solutions
implemented ensure that knowledge & skills are transferred & applied in the workplace.
The turnaround time on claims processing has significantly decreased & has, therefore, impacted positively on productivity
& customer service.
2013)
Required Skills
Priorities
Managers
Professionals
Technicians
& Trade
Workers
Community
& Personal
Service
Workers
Clerical &
Admin
Workers
Sales
Workers
Machinery
Operators
& Drivers
Elementary
Workers
Total
ABET
1
3
0
16
62
0
0
39
121
Administrative
711
1 564
192
7
4 517
13 502
0
44
20 537
Communication
900
3 249
296
14
13 423
764
4
40
18 690
Compliance
6 795
9 462
1 310
234
18 126
21 730
71
137
57 865
Computer & ICT
1 167
1 602
201
32
3 820
518
2
26
7 368
Customer care
887
850
187
7
3 793
920
5
22
6 671
Diversity/
transformational
1 614
2 034
146
99
3 613
866
17
57
8 446
Financial
1 735
5 206
492
125
4 031
1 731
13
44
13 377
HIV/AIDS
63
96
1
0
168
0
0
0
328
Human resource
development
1 370
2 370
808
69
4 196
873
7
48
9 741
Life
skills/personal
mastery
Management &
leadership
3 578
4 695
1 122
255
12 849
2 373
33
139
25 044
8 690
10 372
293
12
4 101
667
4
13
24 152
Marketing/sales
1 545
8 813
2
0
2 461
11 406
0
323
24 550
Risk management
233
575
48
0
1 015
508
0
1
2 380
Technical
15 734
27 112
4 805
273
87 838
31 656
114
326
167 858
Total
45 023
78 003
9 903
1 143
164 013
87 514
270
1 259
387 128
Page 102
2012)
Required Skills
Priorities
Machinery
Operators
& Drivers
Technicians
& Trade
Workers
Professionals
Managers
Sales
Workers
Clerical
Workers
Community
& Personal
Service
Workers
Elementary
ABET
Technical
Management &
leadership
21
166
11
0
1 933
430
0
32 235
5 537
0
17 494
8 758
0
30 448
1 031
Compliance
Computer & ICT
Risk
management
Financial
Life
skills/personal
mastery
Communication
Human resource
development
12
12
0
965
194
42
10 157
1 865
2 47
7 817
984
142
5
30
2 909
342
1 402
3 827
1
5
532
414
Administrative
HIV/AIDS
Marketing/sales
Customer care
Diversity/
transformational
5
0
0
2
4
Total
Internal costs
External costs
Total
339
77 299
9 368
215
448
7
76
269
24
651
160 292
25 166
20 632
851
69
20 464
4 276
338
169
126
0
93
0
3
60 309
8 308
841
734
11 361
1 435
424
1 371
8 313
0
244
4
133
7 860
24 674
2 393
2 149
1 335
1 172
1 914
490
5 580
4 035
48
28
43
107
11 846
8 400
23
5
1
30
9
1 231
43
156
2 148
471
1 355
3
581
1 770
432
7 536
0
3 118
2 887
186
3 640
416
273
6 763
645
40
6
0
75
0
33
23
0
21
2
13 863
496
4 129
13 696
1 749
274
R211 113
7 829
R8 037 630
63 861
R89 111 138
53 938
R71 978
455
71 021
R89 093
017
143 120
R152 981
517
1 406
R1 562 462
831
R570 470
342 280
R413 545
802
R7 810
R1 609 453
R10 221 975
R7 235
352
R8 342
865
R15 072
706
R36 752
R1 293 618
R43 820
531
The data in Table 3-7 and Table 3-8, from large and medium companies sampled shows that more clerical
workers are trained than other occupations in the last two financial years. Employees within the sales workers
category (87 514 which increased from 71 021 in 2012), followed by the professionals category (78 003
which increased drastically from 2012 figure of 63 861), and the managers category are included as having a
high number of training interventions prioritised. Although the categories appear to be higher than the number
of people sampled from the large and medium companies, this is because companies will have prioritised
more than one skills priority area or a combination for an employee within that occupational category
(Insurance Sector Education and Training Authority, 2012).
The most requested priority area for training is technical skills that are similar to the results for 2012, followed
by compliance skills, management and leadership skills, life skills, and administration skills. It is interesting to
note that while the numbers being trained has increased, the priorities for training has not, which shows that
the Sector Education and Training Authority’s (SETA’s) current training regimes remain relevant.
Interestingly, skills priorities that are not as high on the list of planned training interventions for employees are
computer and information technology, human resources, financial, and sales and marketing skills.
In this 2011 to 2012 financial year, employers reported spending more money on non-credit-bearing training
(R230 402) than credit-bearing training (R39 676). This is probably attributed to the high investments by
employers in product training and regulatory training (not credit bearing) as opposed to training in full
qualifications (credit bearing). Furthermore, employers spent more money on clerical training than any other
type of training, but this included professionals, sales and management training, where substantial funds are
invested in employees.
3.4
The Demand for Skills
The demand for skills is established from three separate sources. There are change drivers, which form the
underbelly of the demand for skills in relation to occupational categories.
Page 103
The demand for skills is predominantly determined by analysing the INSETA WSP data, which indicate skills
and occupational areas that require training interventions. This is further validated by vacancy analysis and
industry consultation.
Specific change drivers underlie the demand for skills. What is noticeable is that the occupational demand in
2008 still appeared to be the same three years later. This is a good indication of expansion in the sector, but
also indicates that supply for those occupations is not happening as fast as is required by the sector. More
research is required for forecasting this type of skills needs for the future of the sector. If the INSETA plans to
address these skills demands in partnership with the insurance sector, we should not see this same
occupational demand in another three years’ time.
3.4.1
Demand for Skills According to PricewaterhouseCoopers and the INSETA
Two sources of data have been used to establish the demand for skills. The most sought-after scarce skills
are identified below. In addition, a listing of scare and critical skills against the Organising Framework for
Occupations (OFO) is provided.
The industry continues to be plagued by talent shortages. In 2012, the two most sought-after executive
professional positions are specialist underwriters and actuaries. These are followed by capital management
and risk management professionals, non-executive directors and audit committee members, which are also in
high demand. The highest demand for skills, according to the PricewaterhouseCoopers (PWC) report, is the
occupational areas that include IT, compliance, and finance. Administration and audit skills feature on the
lower end of the demand for
skills (PricewaterhouseCoopers,
2012).
The demand for skills in the
below-mentioned
occupational
classes is highlighted in this
section;
occupational
the
classes
identified
indicate
the required demand between
2010 and 2011.
The occupations listed in Table
3-9 are seen as scarce and
critical, based on research undertaken in 2012 to 2013 in the sector (represented against the OFO code).
Chapter 4 will demonstrate evidence on whether these skills still rank as scarce and critical for the sector.
Page 104
Table 3-9: Scarce and critical skills against the OFO codes
Skills Type
OFO
Code
Director (enterprise/organisation) (skill level 5)
111101
Corporate general manager (skill level 5)
111201
Senior government manager (skill level 5)
111407
Advertising & public relations manager (skill level 5)
131101
Sales & marketing manager (skill level 5)
131102
Sales manager (skill level 5)
131103
Corporate services manager (skill level 5)
132101
Finance manager (skill level 5)
132201
Personnel/human resource manager (skill level 5)
132301
Employee wellness manager (skill level 5)
132306
Policy & planning manager (skill level 5)
132401
Research & development manager (skill level 5)
132501
Programme or project manager (skill level 4)
132602
Engineering manager (skill level 5)
133201
Operations manager (non-manufacturing) (skill level 5)
133504
Supply & distribution manager (skill level 5)
133601
Chief information officer (skill level 5)
135101
ICT project manager (skill level 5)
135102
Quality assurance manager (skill level 5)
139906
Office manager (skill level 4)
139908
Practice manager (skill level 4)
139910
Call or contact centre manager (skill level 5)
149201
Customer service manager (skill level 5)
149202
Copywriter (skill level 5)
212401
Accountant (general) (skill level 5)
221101
Management accountant (skill level 5)
221102
Taxation accountant (skill level 5)
221103
External auditor (skill level 5)
221203
Internal auditor (skill level 5)
221204
Compliance officer (skill level 5)
221205
Finance broker (skill level 5)
222102
Insurance broker (skill level 5)
222103
Investment dealer (skill level 5)
222204
Equities analyst (skill level 5)
222205
Financial investment advisor (skill level 5)
222301
Financial investment manager (skill level 5)
222302
Human resource advisor (skill level 5)
223101
Training & development professional (skill level 5)
223301
Actuary (skill level 5)
224101
Statistician (skill level 5)
224103
Health information manager (skill level 5)
224203
Intelligence officer (skill level 5)
224401
Policy analyst (skill level 5)
224402
Management consultant (skill level 5)
224701
Skills development facilitator/practitioner (skill level 5)
224703
Organisational risk manager (skill level 5)
224704
Marketing practitioner (skill level 5)
225103
Communication co-ordinator (skill level 5)
225301
Multimedia designer (skill level 5)
232403
Web designer (skill level 5)
232404
Page 105
Skills Type
OFO
Code
Electronics engineer (skill level 5)
233401
Education or training advisor (skill level 5)
249101
Hospital pharmacist (skill level 5)
251501
Industrial pharmacist (skill level 5)
251502
Retail pharmacist (skill level 5)
251503
Health promotion officer (skill level 5)
251901
Dental specialist (skill level 5)
252301
Occupational therapist (skill level 5)
252401
General medical practitioner (skill level 5)
253101
Nurse educator (skill level 5)
254201
Nurse manager (skill level 5)
254301
Clinical nurse practitioner (skill level 5)
254401
Registered nurse (medical & surgical) (skill level 5)
254408
ICT business analyst (skill level 5)
261101
Systems analyst (skill level 5)
261102
Analyst programmer (skill level 5)
261301
Developer programmer (skill level 5)
261302
Software engineer (skill level 5)
261303
Database administrator (skill level 5)
262101
ICT security specialist (skill level 5)
262102
Systems administrator (skill level 5)
262103
ICT quality assurance engineer (skill level 5)
263201
ICT support engineer (skill level 5)
263202
ICT systems test engineer (skill level 5)
263203
Advocate or barrister (skill level 5)
271101
Solicitor (skill level 5)
271301
Associate legal professional (skill level 5)
271302
Paralegal (skill level 5)
271403
Translator (skill level 5)
272403
Employee wellness practitioner (skill level 5)
272902
ICT customer support officer (skill level 4)
313102
Program or project administrators (sill level 3)
511102
Office administrator (skill level 3)
511201
General clerk (skill level 2)
531101
Word processing operator (skill level 2)
532103
Inbound contact centre consultant (skill level 2)
541101
Outbound contact centre consultant (skill level 2)
541102
Call or contact centre agent (skill level 1)
541401
Payroll clerk (skill level 2)
551301
Settlements clerk banking (skill level 2)
552110
Credit or loans officer (skill level 2)
552201
Insurance administrator (skill level 2)
552302
Statistical clerk (skill level 2)
552304
Insurance claims administrator (skill level 2)
552305
Back office process consultant (skill level 1)
561907
Purchasing officer (skill level 3)
591103
Insurance investigator (skill level 3)
599601
Insurance loss adjuster (skill level 3)
599602
Insurance risk surveyor (skill level 3)
599603
Coding clerk (skill level 2)
599901
Insurance agent (skill level 3)
611201
Sales representative (business services) (skill level 2)
611302
Telemarketer (skill level 1)
639301
Page 106
3.4.2 Industry Analysis
Skills shortages have been rank-ordered in terms of the level of shortage in the PWC study. The findings on
skills shortages in this study are compared with those from WSP submissions. The study points to the
following scarce skills: specialist-underwriting, actuaries, non-executive directors, audit committee and capital
management (PricewaterhouseCoopers, 2012).
The INSETA’s 2012 WSP data show four occupational categories that include specific skills in demand:
x
Professionals, which include actuaries, underwriters, senior financial staff and other specialists such
as IT specialists
x
x
Managers, which include all positions to whom a number of subordinates report
Clerical and admin workers, which include all people lower than managerial level who do
administrative and clerical tasks
x
Sales workers, which include all people who advise on and sell insurance products and services.
3.4.3 Skill Shortages pointed out in the 2012 INSETA PESTEL Report
Stakeholders say there is an inadequate supply of skills entering the sector through the educational system:
“There is no feed into our market coming from our educational system.” The challenge, however, is that
“people enter the insurance industry without the insurance concept” (Stakeholder, Cape Town). Generally,
matriculates are not showing the necessary mathematical and communication ability or work ethic required
for business. This is a major concern for all that are interviewed. The communication requirement has been
specified to include general means of communicating a meaning in a business environment.
Another concern raised is the gap between school and university being too great a skill divide, as students
bridging from school to university lack the ability to discuss and debate issues and would prefer information to
be written down. This also appears to be exacerbated by a lack of preparation for further education.
The report further indicates that, in the case of training needs, the training required by the industry is divided
into the following categories:
x
Mathematical basics of multiplication and division
x
Business management practice
x
Management sustainability
x
Succession planning
x
Broad spectrum of product training
x
Competitor knowledge
x
Financial planning skills
x
Change management
x
Compliance
x
Qualified insurance educational facilitators
The administration skills noted are predominantly company-specific skills, which are being addressed
internally by companies.
There are some similarities between the PWC study and the findings from the INSETA WSP submissions,
particularly with regard to underwriting and actuarial skills. Other skills shortages identified are financial and
IT specialists, a catchall category of managers, and clerical and sales workers.
Page 107
3.4.3.1 Demand for Skills According to Recruitment Trends in the Insurance and RelatedServices Sector
The greatest competition between the insurance and related-services sector and the remainder of the
financial services sector is expected to be in financial management and risk management occupations. Within
the professional occupational category, the INSETA must pay attention to skills development interventions in
these occupations, as competition for these skills in the financial services sector is likely to curtail the supply
of skills available for the insurance and related-services sector.
It should be noted that the occupations in high demand are also shared with other financial service
subsectors. This emphasises the point of competition for skills that impacts both the supply of and demand
for skills. The INSETA’s 2012 PESTEL report indicates that actuaries are not only difficult to find, but are also
difficult to hold on to. The major reason behind actuaries hopping between organisations is that they get
better salary packages from other organisations. The PESTEL interviews also indicate that mainly Black
actuaries are typically moving for better packages.
All three major studies consulted showed a demand for insurance sales workers. It is in this area where it is
necessary to caution the interpretation of the strength of demand, as the data is collected during the postrecession period when the insurance and related-services industry indicated that the attrition of customers is
the biggest impact experienced (PricewaterhouseCoopers, 2010). Furthermore, there is an additional need to
broaden the customer base in order to recuperate these losses. It makes sense, therefore, for companies to
indicate that insurance sales workers are in high demand, because it is a requirement for them to meet their
strategic target of acquiring new customers.
It can be seen from the foregoing that the broader financial services and the insurance sector are competing
for occupations and skills. Therefore, they share specific occupational fields and skills.
Insurance-related occupations have a low demand in the broader financial services sector, but have a high
demand in the insurance sector. Skills interventions by the INSETA need to focus on the financial advisory
and risk management fields.
3.5
Supply and Demand Dynamics for Specific Occupational Fields
This section focuses on the interplay between the supply of and demand for skills. The variables under
discussion are an over- and under-supply of skills in relation to demand. Two sources of data are used in
order to make sense of these supply and demand issues. A further interplay is between training planned and
training implemented. The question that arises is whether these two factors are in equilibrium or in
disequilibrium. Other questions are is the question of the impact of career movement on skills shortages, and
how the overlap between competing skills and occupations between the insurance and the broader financial
services sector, affect skills shortages.
Obtaining data on supply and demand is difficult. However, this section makes use of the best available
sources of data: the INSETA WSP and the INSETA ATR analyses of 2012.
Table 3-10 below analyses the INSETA ATR data for 2012 by examining the training planned compared to
the training actually implemented. The planned training is an indication of skills in demand by registered
INSETA levy-paying companies, whereas the training implemented is the outcome in response to the
indicated demand. The latter can be considered the supply of skills, because it culminates in a pool of newly
trained individuals or up-skilling of current employees.
Page 108
Table 3-10: April 2011 planned training versus 31 March 2012 actual training completed
Occupational Categories
Planned
Trained
Managers
10 430
15 757
Professionals
10 367
16 714
Sales workers
15 562
31 926
36 800
45 752
Community & personal service workers
215
189
Elementary workers
315
320
Technical workers
283
415
73 972
111 073
Total
Table 3-11 Pivotal Planned Trained Beneficiaries 2014
Occupation
Total
Number
Percentage
of Total
111204 – Senior Government Official
112101 – Director (Enterprise/Organization)
121101 – Finance Manager
121104 – Internal Audit Manager
121201 – Personnel/Human Resources Manager
121202 – Business Training Manager
121901 – Corporate General Manager
121905 – Programme or Project Manager
122101 - Sales and Marketing Manager
122102 - Sales Manager
122103 – Director of Marketing
122105 – Customer Service Manager
133101 – Chief Information Officer
133104 – Application Development Manager
134601 – Bank Manager
134603 – Finance Markets Business Manager
134904 – Office Manager
134911 – Insurance Policy Administration Manager
134915 – Operations Manager (Non-Manufacturing)
143905 – Call or Contact Centre Manager
212101 – Actuary
212102 – Mathematician
212103 – Statistician
215201 – Electronics Engineer
241101 – Accountant (General)
241102 – Management Accountant
241103 – Tax Professional
241107 – Financial Accountant
241201 – Investment Analyst
241202 – Investment Manager
241301 – Financial Investment Advisor
242101 – Management Consultant
0.13242102 – Organization & Methods Analyst
242201 – Intelligence Officer
242202 – Policy Analyst
242207 – Compliance Officer
242208 – Organizational Risk Manager
242210 – Business Administrator
242211 – Internal Auditor
242303 – Human Resource Advisor
242401 – Training & Development Professional
242402 – Occupational Instructor/Trainer
243103 – Marketing Practitioner
243201 – Communication Coordinator
243202 – Marketing & Communication Analyst
251101 – ICT Systems Analyst
251201 – Software Developer
251203 – Developer Programmer
251901 – Quality Assurance Analyst (Computers)
252101 – Database Designer & Administrator
252201 – Systems Administrator
252301 – Computer Network & Systems Engineer
261102 – Administrative Lawyer
5
26
8
1
1
17
188
4
34
29
6
402
1
1
2
1
8
3
4
132
43
1
64
1
39
1
1
26
2
11
171
47
1
12
112
43
2
23
74
10
68
67
40
61
1
361
3
246
3
4
1
3
2
0.06%
0.31%
0.09%
0.01%
0.01%
0.20%
2.21%
0.05%
0.40%
0.34%
0.07%
4.73%
0.01%
0.01%
0.02%
0.01%
0.09%
0.04%
0.05%
1.55%
0.51%
0.01%
0.75%
0.01%
0.46%
0.01%
0.01%
0.31%
0.02%
0.13%
2.01%
0.55%
0.01%
0.14%
1.32%
0.51%
0.02%
0.27%
0.87%
0.12%
0.80%
0.79%
0.47%
0.72%
0.01%
4.25%
0.04%
2.89%
0.04%
0.05%
0.01%
0.04%
0.02%
Page 109
32201 – Assistant Midwife
331101 – Securities Dealer
331201 – Credit or Loans Officer
331301 – Bookkeeper
331302 – Accounting Technician
331401 – Statistical & Mathematical Assistant
331502 – Insurance Investigator
331503 – Insurance Loss Adjustor
332101 – Insurance Agent
33102 – Insurance Broker
332402 – Finance Broker
333301 – Recruitment Consultant/Officer
333903 – Sales Representative (Business Services)
334101 – Office Supervisor
334302 – Personal Assistant
341110 – Associate Legal Professional
351201 – ICT Communications Assistant
351301 – Computer Network Technician
411101 – General Clerk
411102 – Back Office Process Consultant
412101 – Secretary (General)
413201 – Data Entry Operator
421102 – Bank Worker
422201 – Inbound Contact Centre Consultant
422202 – Outbound Contact Centre Consultant
422206 – Call or Contact Centre Agent
422501 – Enquiries Clerk
431101- Accounts Clerk
431201 – Insurance Administrator
431204 – Insurance Claims Administrator
432101 – Stock Clerk/Officer
441203 – Mail Clerk
441501 – Filing or Registry Clerk
441601 – Human Resources Clerk
441603 – Compensation & Benefits Clerk
441903 – Program or Project Administrators
522301 – Sales Assistant (General)
522401 – Call Centre Salesperson
531101 – Child Care Worker
712103 – Abrasive Wheel Maker
732101 – Delivery Driver
811101 – Domestic Cleaner
862913 – Events Assistant
Grand Total
7
1
2
18
6
15
8
151
463
125
1
14
27
1
7
30
62
1
731
1
1
90
1
3542
341
43
1
16
63
202
1
19
16
3
3
7
3
28
28
1
2
1
1
8501
0.08%
0.01%
0.02%
0.21%
0.07%
0.18%
0.09%
1.78%
5.45%
1.47%
0.01%
0.16%
0.32%
0.01%
0.08%
0.35%
0.73%
0.01%
8.60%
0.01%
0.01%
1.06%
0.01%
41.67%
4.01%
0.51%
0.01%
0.19%
0.74%
2.38%
0.01%
0.22%
0.19%
0.04%
0.04%
0.08%
0.04%
0.33%
0.33%
0.01%
0.02%
0.13%
0.01%
WSP data 2014/2015
It can be seen from the table above that the occupations to which more planned pivotal training for
employees has been allocated are the following, in descending order of importance from the highest to the
lowest. The occupations, which have an allocated percentage of 2% and above, are regarded as more
important in terms of pivotal training allocation, viz.
x
inbound contact centre consultant,
x
general clerk,
x
insurance agent,
x
customer service manager,
x
ICT systems analyst,
x
outbound contact centre consultant,
x
developer programmer,
x
insurance claims administrator,
x
corporate general manager,
x
financial investment advisor,
Inbound contact centre consultant stands out above all other occupations in terms of the amount of pivotal
training that has been allocated to it. What is also apparent is that the occupations that have the most
employees occupying them are those to which the most planned pivotal training are directed. This table also
shows that the direction of pivotal training is widely distributed across 96 occupations. Note: Occupations
associated with percentages between 0.1 and 1.99%, are regarded as less meaningful in relation to planned
Page 110
pivotal training. What this also shows is that the pivotal training is geared towards pivotal critical skills (socalled top-up skills) and not scarce skills.
Table 3-12: 1 April 2012 planned training versus 31 March 2013 actual training completed
Occupational Class
Total
Total
Percentage
Planned
Trained
Difference
23737
39492
40%
58
81
28%
237
277
14%
68
65
0%
8784
12415
29%
Professionals
7754
16086
52%
Sales workers
21984
31412
30%
940
1460
36%
63562
101288
37%
Community & personal service workers
Elementary workers
Managers
Total
Table 3-10 analyses skills development in terms of major occupational categories, ranging from clerical and
admin workers to managers. What is apparent is that in the majority of occupational categories with the
exception of one, actual training implemented exceeds training planned. The one exception is community and
personal service workers, where the training planned exceeds the training implemented by 26 persons. It is
clear that the planned skills development in each of the major occupational categories is drastically lower
than the training completed in each category. The question that arises then is why the training implemented is
exceeding the training planned. What it suggests is that levy-paying stakeholder companies are largely
underestimating their training requirements.
Another question is whether the stakeholder companies identifying the relevant types of training. The level of
difficulty in recruiting for insurance jobs, ranging from actuaries to underwriting, is a point in question.
Overall, the total number of planned training within the top seven occupational categories is 73 972.
However, the total number of people trained is actually 111 073. This indicates that 37 101 more people
received training than is planned. Table 3-10 also indicates that many people intended for training are in the
clerical and admin category (36 800) and sales workers category (15 562). It is not surprising, therefore, that
much of the training took place within the clerical (45 752) and sales workers (31 926) categories.
It can be seen from the
Table 3-11 Pivotal Planned Trained Beneficiaries 2014
Occupation
Total
Number
Percentage
of Total
111204 – Senior Government Official
112101 – Director (Enterprise/Organization)
121101 – Finance Manager
121104 – Internal Audit Manager
121201 – Personnel/Human Resources Manager
121202 – Business Training Manager
121901 – Corporate General Manager
121905 – Programme or Project Manager
122101 - Sales and Marketing Manager
122102 - Sales Manager
122103 – Director of Marketing
122105 – Customer Service Manager
133101 – Chief Information Officer
133104 – Application Development Manager
134601 – Bank Manager
134603 – Finance Markets Business Manager
134904 – Office Manager
5
26
8
1
1
17
188
4
34
29
6
402
1
1
2
1
8
0.06%
0.31%
0.09%
0.01%
0.01%
0.20%
2.21%
0.05%
0.40%
0.34%
0.07%
4.73%
0.01%
0.01%
0.02%
0.01%
0.09%
Page 111
134911 – Insurance Policy Administration Manager
134915 – Operations Manager (Non-Manufacturing)
143905 – Call or Contact Centre Manager
212101 – Actuary
212102 – Mathematician
212103 – Statistician
215201 – Electronics Engineer
241101 – Accountant (General)
241102 – Management Accountant
241103 – Tax Professional
241107 – Financial Accountant
241201 – Investment Analyst
241202 – Investment Manager
241301 – Financial Investment Advisor
242101 – Management Consultant
0.13242102 – Organization & Methods Analyst
242201 – Intelligence Officer
242202 – Policy Analyst
242207 – Compliance Officer
242208 – Organizational Risk Manager
242210 – Business Administrator
242211 – Internal Auditor
242303 – Human Resource Advisor
242401 – Training & Development Professional
242402 – Occupational Instructor/Trainer
243103 – Marketing Practitioner
243201 – Communication Coordinator
243202 – Marketing & Communication Analyst
251101 – ICT Systems Analyst
251201 – Software Developer
251203 – Developer Programmer
251901 – Quality Assurance Analyst (Computers)
252101 – Database Designer & Administrator
252201 – Systems Administrator
252301 – Computer Network & Systems Engineer
261102 – Administrative Lawyer
32201 – Assistant Midwife
331101 – Securities Dealer
331201 – Credit or Loans Officer
331301 – Bookkeeper
331302 – Accounting Technician
331401 – Statistical & Mathematical Assistant
331502 – Insurance Investigator
331503 – Insurance Loss Adjustor
332101 – Insurance Agent
33102 – Insurance Broker
332402 – Finance Broker
333301 – Recruitment Consultant/Officer
333903 – Sales Representative (Business Services)
334101 – Office Supervisor
334302 – Personal Assistant
341110 – Associate Legal Professional
351201 – ICT Communications Assistant
351301 – Computer Network Technician
411101 – General Clerk
411102 – Back Office Process Consultant
412101 – Secretary (General)
413201 – Data Entry Operator
421102 – Bank Worker
422201 – Inbound Contact Centre Consultant
422202 – Outbound Contact Centre Consultant
422206 – Call or Contact Centre Agent
422501 – Enquiries Clerk
431101- Accounts Clerk
431201 – Insurance Administrator
431204 – Insurance Claims Administrator
432101 – Stock Clerk/Officer
441203 – Mail Clerk
441501 – Filing or Registry Clerk
441601 – Human Resources Clerk
441603 – Compensation & Benefits Clerk
441903 – Program or Project Administrators
522301 – Sales Assistant (General)
522401 – Call Centre Salesperson
531101 – Child Care Worker
712103 – Abrasive Wheel Maker
732101 – Delivery Driver
3
4
132
43
1
64
1
39
1
1
26
2
11
171
47
1
12
112
43
2
23
74
10
68
67
40
61
1
361
3
246
3
4
1
3
2
7
1
2
18
6
15
8
151
463
125
1
14
27
1
7
30
62
1
731
1
1
90
1
3542
341
43
1
16
63
202
1
19
16
3
3
7
3
28
28
1
2
0.04%
0.05%
1.55%
0.51%
0.01%
0.75%
0.01%
0.46%
0.01%
0.01%
0.31%
0.02%
0.13%
2.01%
0.55%
0.01%
0.14%
1.32%
0.51%
0.02%
0.27%
0.87%
0.12%
0.80%
0.79%
0.47%
0.72%
0.01%
4.25%
0.04%
2.89%
0.04%
0.05%
0.01%
0.04%
0.02%
0.08%
0.01%
0.02%
0.21%
0.07%
0.18%
0.09%
1.78%
5.45%
1.47%
0.01%
0.16%
0.32%
0.01%
0.08%
0.35%
0.73%
0.01%
8.60%
0.01%
0.01%
1.06%
0.01%
41.67%
4.01%
0.51%
0.01%
0.19%
0.74%
2.38%
0.01%
0.22%
0.19%
0.04%
0.04%
0.08%
0.04%
0.33%
0.33%
0.01%
0.02%
Page 112
811101 – Domestic Cleaner
862913 – Events Assistant
Grand Total
1
1
8501
0.13%
0.01%
WSP data 2014/2015
It can be seen from the table above that the occupations to which more planned pivotal training for
employees has been allocated are the following, in descending order of importance from the highest to the
lowest. The occupations, which have an allocated percentage of 2% and above, are regarded as more
important in terms of pivotal training allocation, viz.
x
inbound contact centre consultant,
x
general clerk,
x
insurance agent,
x
customer service manager,
x
ICT systems analyst,
x
x
x
insurance claims administrator,
x
corporate general manager,
x
Inbound contact centre consultant stands out above all other occupations in terms of the amount of pivotal
training that has been allocated to it. What is also apparent is that the occupations that have the most
employees occupying them are those to which the most planned pivotal training are directed. This table also
shows that the direction of pivotal training is widely distributed across 96 occupations. Note: Occupations
associated with percentages between 0.1 and 1.99%, are regarded as less meaningful in relation to planned
pivotal training. What this also shows is that the pivotal training is geared towards pivotal critical skills (socalled top-up skills) and not scarce skills.
Table 3-12, which analyses training for the period 1 April 2012 to 31 March 2013, and focuses on planned
versus actual training, that the occupational class with the highest demand for planned training is clerical and
admin workers. This is followed by sales workers, managers, professionals, technicians and trade workers,
elementary workers, machinery operators and drivers, and finally, community and personal service workers.
For all occupational classes, with the exception of machinery operators and drivers, the total number of
employees trained exceeded the number of employees that are planned to be sent on training. The difference
column reflects the percentage increase between the number of employees being contemplated for training
and the actual number that are trained.
Although the training conducted far exceeds the training intended, the movement of employees from entry
level to higher positions leads to a constant skills shortage. The competition for labour resources between the
insurance and financial sectors means that one sector may be left with skills challenges as the workforce
crosses over to another sector. The continuous growth of the insurance sector, even during the 2008
recession, meant that more people needed to be skilled.
There is limited demand for junior skills in the broader financial services sector, but what is noteworthy is that
the insurance sector is able to mitigate this circumstance by employing school leavers who go on to obtain
FAIS regulatory qualifications.
Page 113
35000
30000
25000
20000
<34
15000
35-49
10000
50-64
65+
5000
0
Grade 9
Matric
and below Grade 10
to Grade
12
Level 5 Level 6 - 8 Level 9
Diploma Degree, Doctorate
Honours,
PhD
Masters
Level 10
Figure 3-6: Educational level by age in 2012
Another concern for the sector is the few graduates available to enter the sector. There are more White
candidates with higher-level degrees and diplomas compared to Blacks in the 155 companies sampled. The
sector is also taking on a high number of youths with Grade 10 to 12 certificates. According to the Green
Paper on Post Schooling, South Africa is still not producing enough graduates to meet its economic
development objectives.
South African universities are characterised by relatively low success rates: 74% in 2010 compared to a
desired national norm of 80%. This results in a graduation rate of 15%, which is well below the national norm
of 25% for students in three-year degree programmes in contact education. In contact universities, well under
one-third of students complete their courses in regulation time and one in three graduates within four years.
This is a distressing blow to the ambitions of tens of thousands of dropouts each year and is a iste of the
resources of both parents and the state. Improvement of throughput rates must be the top strategic priority of
university education. Among other things, this will allow us to increase the number of graduates
disproportional to the increase in the relatively modest projected expansion of university enrolments.
Although postgraduate enrolments in both masters and doctoral programmes remain low, compared with
other levels (see Figure 3-6) they have been increasing in number over the last 15 years (Department of
Higher Education and Training, 2012).
The proportion of Black doctoral graduates has also been increasing. In 1995, South Africa produced 679
doctoral graduates, which had grown to 967 in 2000, 1 188 in 2005 and 1 420 by 2010 (or 26 doctorates per
million of the country’s total population). In 2010, 48% of the doctoral graduates are White (87% in 1995),
38% are African (6% in 1995), 7% are Indian (3% in 1995) and 6% are Coloured (4% in 1995). The number
of Africans has, however, likely been boosted by the increased numbers of foreign students from other
African countries. Approximately six out of 10 doctoral graduates are male, indicating a need to increase the
number of females studying for doctorates (Department of Higher Education and Training, 2012).
Despite obvious progress concerning the numbers of doctoral graduates (with 26 doctorates per million of the
country’s total population), South Africa lags far behind countries such as Portugal (569 per million), the
United Kingdom (288 per million), Australia (264 per million), the United States of America (201 per million),
Korea (187 per million) and Brazil (48 per million).
3.6
Concluding Remarks
It has been indicated in this chapter that the supply of financial advisors is limited. The insurance industry
does not agree about whether there is an adequate or inadequate supply of actuaries. Reasons have been
advanced why there are issues around the training of actuaries. Similarly, reasons have been put forward
regarding why it is difficult to retain actuaries within the insurance industry. It is indicated that it is necessary
to use multiple research methods to obtain data about skills supply and demand, as labour market data is not
Page 114
robust. The above methods provide a comprehensive picture of skills supply and demand within the South
African insurance sector. It can be seen that one major source for the above type of data is the WSP and
ATR. A listing of scarce and critical skills against the OFO is provided in this chapter. Also scarce and critical
skills are identified from the PWC study. This type of analysis is restricted to INSETA levy-paying companies.
It is emphasised here that Grade 12 mathematics is an essential prerequisite to gain entry into the South
African insurance industry. Passing of mathematics at matric level also has secondary value in that it allows
one to be exempted from specific FAIS requirements. It has been emphasised that the attainment of various
career directed degrees of diplomas allow for access into the insurance industry. A shortage of skills supply
within the insurance sector is compounded by the fact that graduates who qualify for a career in insurance
are equally employable within the broader financial services sector. The different foci of the WSP and ATR
data in yielding a picture of skills supply and demand are highlighted.
What factors compound the supply of matriculates to the South African insurance industry? There is an
ambiguity regarding the supply of matriculates to the insurance sector and the South African economy in
general. Overall, the number of matriculate NSC enrolments has declined between 2009 and 2011; however,
the number of part-time enrolments has increased. Part-time enrolments imply that it will take longer for the
matriculates to become available to the insurance sector. In addition, there is a relative difference between
those who wrote, compared to those who enrolled for matric.
There is an opportunity for learners who have not obtained a matriculation exemption to pursue a BTEC
National Diploma, which is recognised by HESA.
Stakeholders have reiterated that there is an insufficient supply of labour at the entry-level market. They
distinguished between the entry-level and the upper-level market.
Other problematic issues that have been identified are the high attrition rate of young people exiting the
insurance market. A small percentage of matriculates are eligible to pursue university studies. Another factor
that compounds the availability of matriculates to the insurance industry is the difference between the number
of students enrolled versus those that passed Grade 12.
The supply of skills from tertiary institutions has been looked at from various perspectives: the fact that there
are various types of institutions, universities, universities of technology, and comprehensive universities.
These institutions offer different types of qualifications. Comprehensive universities are a combination of two
different types of institutions. There are also administrative hubs which partner with other universities. The
headcount of universities as well as the distribution of undergraduate and postgraduate students are looked
at. The changing racial distribution of learners is looked at between 2009 and 2010. The number of Black and
African learners has improved substantially between 1994 and 2010. Pertinent insurance-related
qualifications that are supplied by tertiary institutions have been identified. Another relevant issue is that
university funding has not kept up with enrolment growth. The supply of skills from tertiary institutions has
been detrimentally affected by the poor living conditions prevalent at these institutions. Limitations in
infrastructure also impinge on the ability of these institutions to supply skills. In sum, various factors impinge
on the ability of the above institutions to supply skills. These issues are being addressed by the DHET.
The importance of research and innovation to meet the objectives of the MTSF has been discussed in this
chapter.
The supply of skills from the insurance and the related financial services sector is also addressed. One of the
ways in which the INSETA achieves this is through learnerships and internships. External recruits also
contribute to the supply of occupationally directed skills. The racial distribution of these external recruits for
2013 is provided. It is shown that the number of Black external recruits has increased between 2012 and
2013, which is indicative of positive transformational efforts on the part of the INSETA levy-paying employers.
There has been an 11 increase of Black external recruits between 2012 and 2013.
Page 115
The supply of skills from the INSETA Education Training and Quality Assurance (ETQA) is reflected in terms
of uploads to the NLRD. Another measure of the supply of skills is the number of learners who have
completed learnerships. The breakdown of the number of learners in a learnership by province for 2012 is
also provided.
`
The reasons for companies not taking up learnerships ranged from the inability of the company to recruit the
right learner to the fact that small companies do not have the capacity to handle the learnership. The reasons
why there is an attrition rate of learners from learnerships is explained. It is indicated that in order to achieve
a higher success rate with learnerships, improvements in various areas have to occur, for example ensuring
that new learnerships only open once the old ones have closed. The role of the FET colleges in learnerships
cannot be over-emphasised. The breakdown of learnerships by race and gender is also given for the 20112012 financial year. Over 18 million rand is allocated to the internship project. An offshoot of this project is a
project for intellectually disabled adults. The provincial spread of internships for 2012 is outlined.
A question addressed is what type of interventions exists for the supply of skills into the insurance sector?
Another question is what is the impact of these interventions? Comments on the positive impact of training
ranged from the impact on the level of production to the reduction of turnaround time on the processing of
claims. Other foci of this chapter are the most popular training skills reported by medium and large
companies in the insurance sector. This is measured for the years 2012 and 2013. The most popular
occupational categories identified for training for 2013 are clerical workers, followed by sales workers,
followed by professionals and then by managers. The most popular priority areas for training are identified.
Non-credit-bearing training received more emphasis than credit-bearing training. Reasons for this are
advanced.
It is shown that the demand for skills is established from the WSP data, vacancy analyses, and industry
consultation. It is indicated that specific change drivers underpin the demand for skills.
The most sought after professional executive positions in the insurance sector and the highest areas of
demand for skills are identified. It is shown that the sought after areas for recruitment varied between 2008
and 2010.
Scarce and critical skills are also identified in this chapter using the OFO. These areas ranged from actuary
to occupational analyst. The top five scarce and critical skills are identified. There are four occupational
categories that reflect occupational demand (INSETA, 2012).. These range from professionals to sales
workers.
Identified skills shortages included mathematical basics of multiplication and division (INSETA, 2012).
The inadequate supply of skills coming from the South African educational system is also identified. The
demand for skills within the insurance and the related financial services sector is also evaluated. It is
indicated that there is a rivalry between the insurance and the related financial service sector in the search for
skills. The types of skills that are competed for between these two sectors are financial management and risk
management skills. It is thus shown that the INSETA interventions need to focus on the financial advisory and
risk management fields. The high demand for insurance sales workers needs to be cautiously interpreted
against the backdrop of the post-recessionary period.
The question of supply and demand dynamics for specific occupational fields is also addressed. An
examination of training planned versus training implemented is done for occupational categories ranging from
managers to technical and trade workers. Trends identified are that more people received training than is
planned. Occupational areas where more training took place than is planned occurred in the majority of
occupational categories albeit with one exception where the opposite occurred. Between 2011 and 2012, the
one exception is community and personal service workers. Between 2012 and 2013, the one exception is
Page 116
machinery operators and drivers. Reasons are suggested why the incidence of the implementation of training
is greater than planned training.
An analysis is also undertaken of educational level by age. The disparity between Black and White persons
with regard to higher degrees and diplomas is noted, where Whites have more of these types of qualifications
than Blacks. Other issues looked at are the relatively low success rates of South African universities, and the
low graduation rate with respect to the national norm. The proportion of Black doctoral graduates is also
reviewed for the period of 1995 to 2010. This chapter also showed that South Africa lags far behind with
respect to the production of doctoral graduates in comparison with countries like Portugal and the United
States of America.
Page 117
CHAPTER 4
Scarce and Critical Skills
4.1
Introduction
Scarce and critical skills are analysed using the
(INSETA) Workplace Skills Plan (WSP) data and
critical skills analyses that are augmented by survey
findings
from
employers.
The
levy-paying
data
insurance
identified
four
sector
major
occupational areas with regard to scarce and critical
skills priorities. These areas are discussed in this
chapter.
One-on-one interviews are conducted with key
insurance sector stakeholders in various subsectors
in order to corroborate the findings for this Sector
Skills Plan (SSP) research. In the submissions, employers are first asked whether they had tried to recruit
new employees in the preceding year and if so, whether they had difficulty in finding suitable candidates for
the positions that they wanted to fill. Employers are also asked to identify the specific occupations for which
they could not find suitable candidates, the number of positions they are trying to fill, and the reasons (in their
opinion) why they could not find the right people.
Employers are given the following overview of the meaning of scarce and critical skills, so that they could
accurately determine the skills demand: Scarce skills are reported as the occupations in which there is a lack
of sufficiently trained or available skilled individuals to fill positions available in the sector. Critical skills refer
to “top-up” skills within an occupation. These can include cognitive skills, such as problem solving, language
and literacy skills. These “top-up” skills can be specific to a particular occupation, resulting in skills gaps that
might arise because of phenomena such as improved technologies or new forms of work organisation.
Priority skills, as reported in the INSETA’s WSPs, can be one or a combination of both the scarce and “topup” skills. INSETA decided to focus attention on these areas, in a particular financial year.
This chapter presents scarce and critical skills identified by 155 organisations sampled for this research. An
analysis is conducted based on the supply and demand for skills in the labour market. The labour market
intelligence summary follows from the research information gathered.
The budget allocation assigned to one of the National Skills Development Strategy III (NSDS III) strategicoriented goals is discussed in this chapter. The applicable NSDS III indicator and the INSETA programme are
identified here. A project running at present, which falls under the below-mentioned strategic-oriented sgoals,
is outlined here. It offers an internship that addresses a critical skills need on a national level. This project is
experiencing a snowball rollout effect in terms of South African regions.
Table 4-1 indicates that R60 973 590 has been allocated to the INSETA’s Scarce and Critical Skills
Programme (rand amount allocation is for the 2012/2013 financial year). This is being used to fund five
projects. It is used to meet the NSDS III strategic oriented goal of better use of workplace-based skills
development. The NSDS III indicator of relevance here is 4.5.
Page 118
Table 4-1: Amount allocated to the INSETA’s Scarce and Critical Skills Programme
NSDS III Strategic Oriented Goal
NSDS
Programme
Amount allocated for
Indicator
2012/2013 financial
year
Better
use
of
workplace-based
skills
4.5
development
Scarce
and
Critical
R 60 973 590
Skills
(5 active projects)
A current project, viz. Business and Systems Analysts (BASA) 2012, provides a 12-month internship
programme for the development of business and systems analysts, addressing a critical skills need and
increasing the competitiveness of the sector to facilitate growth and sustainability on a national level. The
programme, since inception, has shown a steady improvement in employment rate of graduating learners
and the project, currently in the Western Cape, will roll out in Gauteng in the next year to meet increasing
demands on a national level (INSETA, 2013).
4.2
Scarce and Critical Skills Reported in the Insurance Sector
In 2008, the most important talent issue faced by South African insurers centred on Black Economic
Empowerment (BEE), in 2010, was Information Technology (IT), and in 2012, it centred on specialist
underwriting. The focus was specialist underwriters, followed by actuaries and then non-executive directors.
However, 10 of the 12 different human resource positions scored above three, suggesting that talent
shortages exist across the industry. Ten companies attributed the maximum score of five-out-of-five to
actuaries and non-executive directors, while 11 companies assigned five-out-of-five to specialist underwriters
(PricewaterhouseCoopers, 2012).
The demand for critical skills for 2014 is presented in this chapter. The count for each critical skill is shown
together with what percentage it constitutes of the total.
Using data from the INSETA Annual Training Report (ATR) database, an analysis of the current as well as
future demand for skills within the insurance sector has been undertaken. Note that this analysis is based on
the entire insurance sector, further information and analysis on a subsector basis has been provided in the
appendix to the SSP.
The outcomes from the analysis of the critical skills are outlined in the table below. The table outlines the top
10 critical skills demanded for 2014 (for information on demand in 2015–2017 - please refer to the appendix
of this SSP). The second column gives the description of the skill required as well as the associated skill
level, followed by the Organising Framework for Occupations (OFO) code. Following this is the actual
number/count of the skills required followed by the percentage that this count contributed to demand in 2014.
The highest type of skills in demand is that of insurance agents. In total, there is a current need for 144 that is
14.27% of the total skills demand for 2014. Another critical skill that requires intervention by the insurance
sector is the outbound contact centre consultant given the double-digit percentage level of demand attached
to it.
Page 119
Table 4-2: The top 10 critical skills demanded for 2014
Rank
Skills Type
OFO
2014
Percentage
Code
Demand
2014 Total
Code
1
611201
144
14.27%
Immediate
2
Outbound
541102
108
10.70%
Immediate
contact
centre
Colour
consultant (skill level 2)
3
222103
67
6.64%
Medium
4
224101
63
6.24%
Medium
5
Sales & marketing manager (skill
131102
60
5.95%
Medium
Longer
level 5)
6
261101
45
4.46%
7
Developer programmer (skill level
261302
42
4.16%
administrator
552305
38
3.77%
Financial investment advisor (skill
222301
32
3.17%
552304
32
3.17%
term
Longer
5)
8
term
Insurance
claims
Longer
(skill level 2)
9
term
Longer
level 5)
10
term
Longer
term
(INSETA ATR, 2013)
Table 4-3 Identified Critical Skills 2014-2017
Rank
Skills Type
OFO
Code
20142015
Percentage
of Total
Rank
20152016
Accountant (General)
(NQF level 7)
241101
1
0.08%
Actuary (NQF level 5 to 8)
212101
68
5.32%
4
43
4.33%
5
23
3.58%
Abrasive Wheel Maker
712103
10
0.78%
12
15
1.51%
8
20
3.11%
20
2
0.31%
2014-2015
25
3
16
Percentage
of Total
Rank
20162017
2015-2016
Percentage
of Total
2016-2017
(NQF level 5)
25
Administrative Lawyer
(NQF level 7)
261102
Advertising & Public
Relations Manager (NQF
level 6)
122201
Applications Programmer
251401
1
216101
5
23
3
0.30%
18
4
0.62%
0.08%
25
1
0.10%
21
1
0.16%
0.39%
23
3
0.30%
(NQF level 4)
21
Architect (NQF level 8)
Rank
Skills Type
OFO
Code
20142015
Percentage
of Total
Rank
20152016
Percentage
of Total
Rank
20162017
Percentage
of Total
2014-2015
4
Associate Legal
Professional (NQF level 6
to 7)
341110
50
3.91%
2015-2016
2
49
4.93%
15
10
1.01%
2016-2017
Attorney (NQF level 5)
25
16
Automotive Parts
Salesperson (NQF level
4)
522303
Bookkeeper (NQF level 5)
331301
1
0.08%
Call Centre Salesperson
524401
10
0.78%
13
10
1.56%
(Below level 1 to NQF 4)
Call or Contact
Centre Agent
(NQF level 4)
422206
Page 120
Rank
Skills Type
OFO
Code
20142015
Percentage
of Total
Rank
20152016
2014-2015
22
Call or Contact
Centre Manager (NQF
level 4)
143905
Caretaker/Cleaner
(NQF Level 2)
811204
25
Chief Information
Officer (NQF level 5 to
24
Percentage
of Total
Rank
20162017
Percentage
of Total
2015-2016
2016-2017
4
0.31%
22
4
0.40%
18
4
0.62%
133101
1
0.08%
24
2
0.20%
20
2
0.31%
Clinical Nurse
Practitioner (Below
NQF Level 1 to Level
6)
222101
2
0.16%
5
42
4.23%
20
2
0.31%
Commercial Services
Sales Agent
(NQF Level 5)
332204
Compliance Officer
(NQF Level 7)
242207
1
0.08%
Rank
Skills Type
OFO
Code
20142015
Percentage
of Total
Rank
20152016
Percentage
of Total
Rank
20162017
Computer Network &
Systems Engineer
252301
22
4
0.40%
18
4
0.62%
8)
25
2014-2015
23
3
0.23%
Percentage
of Total
2015-2016
2016-2017
(NQF level 5)
Contact Centre Resource
Planner
422204
(NQF level 5)
23
Copywriter
(NQF level 7)
264201
3
0.23%
11
Corporate General
Manager (NQF level 4 to
NQF level 7)
121901
16
1.25%
11
19
1.91%
15
6
0.93%
22
Corporate Services
NQF level 6)
121902
4
0.31%
22
4
0.40%
15
6
0.93%
17
Customer Service
NQF level 7)
122105
9
0.70%
16
9
0.91%
15
6
0.93%
25
Database Designer &
Administrator (NQF level
5 to NQF level 7)
252101
1
0.08%
25
1
0.10%
15
6
0.93%
5
Developer Programmer
251203
3
6
(NQF level 4 to
Rank
Skills Type
OFO
Code
20142015
Percentage
of Total
Rank
20152016
2014-2015
NQF level 7)
Director
(Enterprise/Organization)
44
Percentage
of Total
Rank
20162017
Percentage
of Total
2015-2016
3.44%
112101
46
4.63%
20
6
0.60%
2016-2017
23
3.58%
(NQF level 5 to NQF 8)
24
Director of Marketing
NQF level 5 to NQF level
7)
122103
2
0.16%
23
3
0.30%
24
Enrolled Nurse
(NQF level 6)
322101
2
0.16%
25
1
0.10%
21
1
0.16%
Environmental Impact &
Restoration Analyst
214302
(NQF level 7)
21
2
Finance Manager
NQF level 5 to 8)
122101
5
0.39%
22
4
0.40%
19
3
0.47%
Financial Investment
Advisor (NQF level 4 to
NQF level 8)
241301
78
6.18%
7
38
3.93%
3
34
5.29%
Funeral Director
NQF level 5)
516301
Page 121
Rank
Skills Type
OFO
Code
20142015
Percentage
of Total
23
General Medical
Practitioner (NQF level 7)
221101
3
0.23%
23
Health Information
Manager (NQF level 5)
325201
3
0.23%
Hospital Pharmacist
(NQF level 8)
226201
Human Resource Advisor
(NQF level 6 to 9)
242303
ICT Security Specialist
(NQF level 6)
252901
12
ICT Systems Analyst
(NQF level 6 to NQF
level 8)
24
Inbound Contact Centre
Consultant
Rank
20152016
2014-2015
21
Percentage
of Total
Rank
20162017
Percentage
of Total
2015-2016
2016-2017
23
3
0.30%
15
6
0.93%
25
1
0.10%
21
1
0.16%
0.31%
5
0.39%
20
6
0.60%
251101
15
1.17%
9
29
2.92%
422201
2
0.16%
24
2
0.20%
20
2
Rank
20152016
Percentage
of Total
Rank
20162017
19
3
0.47%
(NQF level 4 to NQF
level 5)
Rank
Skills Type
OFO
Code
20142015
Percentage
of Total
Industrial Pharmacist
NQF level 6 to NQF level
7
226202
Information Services
Manager
262202
2014-2015
23
3
Percentage
of Total
2015-2016
0.23%
4
0.40%
25
1
0.10%
2016-2017
(NQF level 7)
25
Information Technology
Manager
133105
1
0.08%
431201
1
0.08%
24
2
0.20%
(NQF level 4 to NQF
level 7)
25
Insurance Administrator
(NQF level to NQF level
7)
1
Insurance Agent
(NQF level 4 to NQF
level 8)
332101
615
48.10%
1
308
31.02%
1
269
41.84%
6
Insurance Broker
(NQF level 4 to NQF
level 6)
332102
42
3.29%
6
39
3.93%
2
37
5.75%
Rank
Skills Type
OFO
Code
20142015
Percentage
of Total
Rank
20152016
Percentage
of Total
Rank
20162017
Percentage
of Total
Insurance Claims
Administrator
431204
34
2.66%
10
29
2.92%
7
23
3.58%
10
29
2.92%
18
4
0.62%
15
1.51%
15
6
0.93%
2014-2015
8
2015-2016
2016-2017
(NQF level 4 to NQF
level 6)
24
Insurance Investigator
(NQF level 4 to NQF
level 7)
331502
2
0.16%
14
Insurance Loss Adjuster
(NQF level 4 to NQF
level 7)
331503
13
1.02%
13
Insurance Risk Surveyor
(NQF level 4 to NQF
level 8)
331504
14
1.10%
15
10
1.01%
14
9
1.40%
22
Intelligence Officer
(NQF level 6)
242201
4
0.31%
22
4
0.40%
18
4
0.62%
Internal Audit Manager
(NQF level 4)
121104
Internal Auditor (NQF
level 5 to 7)
242211
2
0.16%
23
3
0.30%
19
3
0.47%
24
Page 122
Rank
Skills Type
OFO
Code
20142015
Percentage
of Total
Rank
20152016
2014-2015
Percentage
of Total
Rank
20162017
2015-2016
Investment Advisor
(NQF level 7)
241203
22
Investment Analyst
(NQF level 7)
241201
4
0.31%
22
4
0.40%
15
Investment Manager
(NQF level 6 to NQF level
7)
241202
11
0.86%
15
10
1.01%
25
Legal Executive
(NQF level 8)
341102
1
0.08%
25
Library Assistant
(NQF level 7)
441101
1
0.08%
23
Management
Accountant (NQF level 5
to NQF level 6)
241102
3
0.23%
22
4
0.40%
18
Management Consultant
6)
242101
8
0.63%
18
8
Marketing/Communication
243202
Percentage
of Total
Rank
Percentage
of Total
2016-2017
21
1
0.16%
0.81%
21
1
0.16%
Percentage
of Total
Rank
Strategist (NQF level 7)
Rank
Skills Type
OFO
Code
20142015
Marketing Practitioner
9)
243103
32
2.50%
Mathematician
(NQF level 7)
212102
1
0.08%
Media Monitor
(NQF level 7)
264207
Multimedia Specialist
7)
251301
24
Nurse Educator
(NQF level 6)
222114
2
22
Nurse Manager (NQF
level 5 to NQF level 6)
222116
Occupational
Instructor/Trainer
242402
20152016
2014-2015
9
25
20162017
2015-2016
Percentage
of Total
2016-2017
14
12
1.21%
11
13
2.02%
0.16%
24
2
0.20%
20
2
0.31%
4
0.31%
21
5
0.50%
17
5
0.78%
2
0.16%
24
2
0.20%
20
2
0.31%
Rank
Percentage
of Total
Rank
(NQF level 6)
24
Office Manager
(NQF level 6)
134904
Rank
Skills Type
OFO
Code
20142015
Percentage
of Total
Organization and
Methods Analyst
242102
20152016
2014-2015
20162017
2015-2016
1
0.10%
25
1
0.10%
8
32
3.22%
Percentage
of Total
2016-2017
21
1
0.16%
4
32
4.98%
(NQF level 8)
24
Organizational Risk
Manager
242208
2
0.16
(NQF level 7)
Outbound Contact Centre
Consultant
422202
5)
Payroll Manager
(NQF level 7)
121102
25
Personnel/Human
Resources Manager
8)
121201
1
0.08%
25
1
0.10%
18
Policy Analyst (NQF 5 to
NQF level 7)
242202
8
0.63%
17
9
0.91%
12
11
1.71%
19
Policy & Planning
Manager
121301
7
0.55%
22
4
0.40%
13
10
1.56%
25
Program or Project
Administrators
441903
1
0.08%
25
1
0.10%
21
1
0.16%
(NQF 10)
(NQF level 5)
Page 123
Rank
Skills Type
OFO
Code
20142015
Percentage
of Total
Rank
20152016
2014-2015
17
Programme or Project
Manager
Percentage
of Total
Rank
20162017
2015-2016
121905
9
0.70%
13
13
1.31%
Percentage
of Total
2016-2017
21
1
0.16%
7)
24
Programmer Analyst
(NQF level 6)
251202
2
0.16%
24
2
0.20%
25
Quality Assurance
Analyst (Computers)
7)
251901
1
0.08%
23
3
0.30%
Quality Systems Manager
121908
25
1
0.10%
Registered Nurse
(Medical & Surgical)
(NQF level 7)
222108
25
1
0.10%
Registered Nurse
(Medical Practice)
222109
(NQF level 7)
20
6
0.47%
24
2
0.20%
20
2
0.31%
2
0.16%
24
2
0.20%
20
2
0.31%
(NQF level 6)
Registered Medical
Officer
221102
(NQF level 10)
24
Retail Pharmacist
(NQF level 6)
226203
Rank
Skills Type
OFO
Code
20142015
Percentage
of Total
Rank
20152016
Percentage
of Total
Rank
20162017
Percentage
of Total
Sales & Marketing
Manager
122101
19
1.49%
Sales Manager (NQF
122102
11
0.86%
Sales Representative
(Business Services) (NQF
333903
35
2.74%
Sales Representative
(Personal & Household
Goods) (NQF 4)
332203
15
Software Developer
7)
251201
Statistical & Mathematical
Assistant
331401
2014-2015
10
2015-2016
14
2016-2017
12
1.21%
34
3.42%
17
5
0.78%
12
15
1.51%
10
15
2.33%
1.17%
15
10
1.01%
1
0.08%
21
5
0.50%
15
8
1.24%
9
0.70%
19
7
0.70%
9
16
2.49%
6)
15
7
12
17
8)
Grand Total of Scarce
Skills per
1278
993
643
Age Range -2014-2015;
2015-2016;2016-2017
Page 124
Table 4-4 Top 10 scarce skills for 2014-2015
Rank
Rank
Skills Type
OFO
Code
20142015
Percentage
of
Total for
2014-2015
1
Insurance Agent
(NQF level 4 to NQF level 8)
332101
615
48.10%
2
Financial Investment Advisor
241301
78
6.10%
3
212101
68
5.30%
4
Associate Legal Professional (NQF level 6 to 7)
341110
50
3.90%
5
251203
44
3.40%
6
Insurance Broker
332102
42
3.20%
Skills Type
OFO Code
2014-2015
Immediate
Need
Percentage
Immediate
Need
of Total for
2014-2015
7
8
Sales Representative (Business Services) (NQF level 4 to
NQF level 5)
Insurance Claims Administrator
333903
35
2.70%
431204
34
2.60%
9
Marketing Practitioner
243103
32
2.50%
10
Sales & Marketing Manager
122101
19
1.40%
Grand Total of
identified scarce
skills:
1278
WSP data 2014-2015
x
From the above table, it is clear that the top ten scarce skills, in descending order of importance,
ranging from the scarce skill with the most weight to the skill with the least weight are following:
x
insurance agent,
x
financial investment advisor
x
actuary
x
associated legal professional
x
developer programmer
x
insurance broker
x
sales representative (business services)
x
insurance claims administrator
x
marketing practitioner
x
sales and marketing manager.
The actual numbers for each scarce occupation and the corresponding percentage for the same occupation
are presented. The percentages are calculated from the grand total of identified scarce skills (see above).
Page 125
Rank
Ran
k
Skills Type
OFO
Code
20152016
Percentage
of
Total for
2015-2016
1
Insurance Agent
332101
308
31.00%
2
Associate Legal Professional (NQF level 6 to 7)
341110
49
4.90%
3
251203
46
4.60%
4
212101
43
4.30%
5
Clinical Nurse
Practitioner (Below
NQF Level 1 to Level
6)
222101
42
4.20%
6
Insurance Broker
332102
39
3.90%
Skills Type
OFO
Code
Intermediate
Need
2015-2016
Percentage
Intermediate
Need
of Total for
2015-2016
Financial Investment Advisor (NQF level 4 to NQF level
8)
Sales Manager (NQF level 4 to NQF level 8)
241301
38
3.80%
122102
34
3.40%
9
Outbound Contact Centre Consultant
422202
32
3.20%
10
431204
29
2.90%
7
8
Grand Total of
identified scarce skills:
993
WSP data 2014-2015
It can be seen from the above table that the top ten scarce in descending order of importance ranging from
the scarce skill with the most weight to the skill with the least weight are following:
x
insurance agent,
x
associate legal professional,
x
x
actuary,
x
clinical nurse practitioner,
x
insurance broker,
x
x
sales manager,
x
x
x
insurance claims administrator.
Page 126
Rank
Skills Type
OFO
Code
20162017
Percentage
of
Total for
2016-2017
1
Insurance Agent
332101
269
41.80%
2
Insurance Broker
332102
37
5.70%
3
Financial Investment Advisor (NQF level 4 to NQF level
8)
Outbound Contact Centre Consultant
241301
34
5.20%
422202
32
4.90%
4
Rank
5
Actuary (NQF level 5
to 8)
212101
23
3.50%
6
251203
23
3.50%
OFO
Code
2016-2017
Skills Type
Long term
need
Percentage
Long term
need
of Total for
2016-2017
7
431204
23
3.50%
8
Abrasive Wheel Maker
(NQF level 5)
712103
20
3.10%
9
Statistical & Mathematical Assistant
331401
16
2.40%
10
Sales Representative (Business Services) (NQF level 4 to NQF level 5)
333903
15
2.90%
Grand Total of
identified scarce skills:
643
WSP data 2014-2015
x
It can be seen from the above table that the top ten scarce occupations in descending order of
importance ranging from the scarce skill with the most weight to the skill with the least weight are
following:
x
insurance agent,
x
insurance broker,
x
x
x
actuary,
x
x
insurance claims administrator (actuary, developer programmer and insurance claims administrator
(all have equal weight percentages),
x
abrasive wheel maker,
x
statistical and mathematical assistant,
x
sales representative (business services).
An Analysis of the ranking of occupations between the years 2014-2015; 2015-2016, and 2017-2018.
The question that is addressed in this section is “Has there been any change in the ranking of occupations
between the above years?” The occupation insurance agent holds the rank of one, in all of the indicated year
ranges. Between 2014-2015, 2015, and 2016, there is a corresponding numerical and percentage decline in
the number of scarce skills associated with this occupation, viz. 307 and 17.10 percent, respectively. It is
important to note that the grand total of scarce skills associated with the top 10 scarce skills occupations
declines from 2014-2015 to 2016-2017. Between the year range 2014-2015, financial investment advisor
Page 127
assumes the second ranked position, while for the year age range 2015-2016, associate legal professional is
the second ranked position and for the year range 2016-2017, insurance brokers enters the fray as the
number 2 ranked occupational position. For the year range 2014-2015, actuary holds the thirdthird ranked
occupational position, This corresponds with the year range 2015-2016 and 2016-2017, where developer
programmer and financial investment advisor hold the third ranked occupational positions, respectively. For
the year range 2014-2015, associate legal professional assumes the fourth ranked occupational position, in
contrast for the year 2015-2016, actuary comes in at the fourth ranked occupational position, while for the
year 2016-2017, and outbound contact centre consultant comes in at the fourth ranked occupational position.
For the year, range 2014-2015, developer programmer comes in as the fifth ranked occupational position, in
contrast for the year range 2015-2016, a surprising turn-up for the books is that clinical nurse practitioner
assumes the fifth ranked occupational position, while for the year range 2016-2017, actuary is the fifth ranked
occupational position. For the year range 2014-2015, insurance broker assumes the sixth ranked
occupational position, while for the year range 2015-2016; insurance broker holds the same ranked
occupational position, i.e. sixth. In complete contrast, developer programmer assumes the sixth ranked
position for the year range 2016-2017. For the year range 2014-2015, sales representative (business
services) comes in as the seventh ranked occupational position, in contrast for the year range 2015-2016,
financial investment advisor holds the seventh ranked position, while for the year range insurance claims
administrator takes the seventh spot for occupational position. For the year range 2014-2015,
insurance claims administrator takes the eighth spot for occupational position, in contrast for the year range
2016-2017, sales manager comes in at the eighth occupational spot, whilst for the year 2016-2017, a
somewhat surprise entrant is abrasive wheel maker which takes the eighth occupational spot. For the year
range 2014-2015, marketing practitioner takes the ninth occupational spot, while for the year range 20152016, outbound contact centre consultants assumes the ninth occupational place, and finally, for the year
2016-2017, statistical & mathematical assistant takes the ninth occupational position. For the year range
2014-2015, sales & marketing manager comes in as the tenth occupational position, while for the year 20152016, insurance claims administrator takes the tenth occupational position, in contrast for the year range
2016-2017, sales representative (business services) jockeys in at the tenth occupational position. In
conclusion, it can be seen from the above, that occupations assume variant occupational positions between
the years 2014-2015, 2015-2016, and 2016-2017.
Four major occupational areas with scarce and critical skills priorities are identified (Insurance Sector
Education and Training Authority, 2013). These skills priority areas are discussed in the following sections.
4.2.1The Management Category
In the management category, the skill priority with the highest level of demand is sales and marketing
manager (skill Level 5), followed by the following: director (enterprise/organisation), corporate general
manager (skill level 5), and corporate services manager (skill level 5). The last two categories are in equal
demand.
The table below outlines the top 10 skills in demand across this category of employment. It should be noted
that in general there is a shortage of equity candidates in all of these subcategories and while there is
demand in other subcategories this demand is less than 1%, hence it has not been reported.
Page 128
Table 4-7: Top 10 critical skills in the management category
Ranking
Subcategory
OFO
2014
Code
2014
Percentage
1
Sales and marketing manager (skill level 5)
131102
60
30.77%
2
Director (enterprise / organisation) (skill level 5)
111101
29
14.87%
3
111201
19
9.74%
4
132101
19
9.74%
5
149202
14
7.18%
6
131103
12
6.15%
7
Ict project manager (skill level 5)
135102
12
6.15%
8
139910
4
2.05%
9
111407
3
1.54%
10
132201
3
1.54%
(INSETA ATR 2013)
The critical skills of demand in the managerial category are the sales and marketing manager (skill level 5),
followed by the director (enterprise/organization) (skill level 5) because of the double-digit percentage level of
demand
attached
to
these
occupational
categories.
Therefore
the
demand
for
the
director
(enterprise/organization) is slightly under half of that of the director (enterprise/organisation in the
professionals category.
The critical skills in demand in the professional category, in descending order from highest to lowest are:
x
insurance broker (skill level 5),
x
actuary (skill level 5), ICT business analyst (skill level 5), and
x
developer programmer (skill level 5).
This is because they have a double-digit percentage level of demand attached to them. These critical skills
should be sought after by the insurance sector. The level of percentage demand for the insurance broker and
the actuary are relatively close to each other.
For reporting purposes, the top ten skills in demand within this category have been identified. As in the case
with the management category there are also a number of other subcategories of skills in demand, however,
due to demand being very low, these have not been reported on.
Table 4-8: The Top 10 critical skills in the professional category
Ranking
Subcategory
OFO
2014
Code
2014
Percentage
1
222103
67
16.46%
2
224101
63
15.48%
3
261101
45
11.06%
4
261302
41
10.07%
5
222301
32
7.86%
6
252401
21
5.16%
7
221101
16
3.93%
8
271302
11
2.70%
9
224402
9
2.21%
10
221204
8
1.97%
(INSETA ATR 2013)
The critical skills in demand in the professional category in descending order from highest to lowest are
insurance broker (skill level 5), actuary (skill level 5), ICT Business Analyst (skill level 5), and developer
programmer (skill level 5), because they have a double digit percentage level of demand attached to them.
Page 129
These critical skills should be sought after by the insurance sector. The level of percentage demand for the
insurance broker and the actuary are relatively close to each other.
4.2.2 The Sales Workers Category
In the sales workers category, the skill priority with the highest level of demand is insurance agent (skills level
3) at 97.96%, followed by telemarketer (skills level 1), and sales representative (business services) (skill level
2). Note that the demand for 2014 and 2015 has been provided. Unlike the other employment categories, this
category only had three subcategories in demand.
Table 4-9: Top three critical skills in the sales workers category
Ranking
Subcategory
OFO
2014
2014
Code
2015
2015
Percentage
Percentage
1
611201
144
97.96%
117
96.69%
2
639301
3
2.04%
4
3.31%
3
Sales representative (business
611302
0
0.00%
1
0.83%
services) (skill level 2)
(INSETA ATR 2013)
Interestingly, only one occupational category shows a double level digit percentage of demand, viz. insurance
agent (skill level 3), and the insurance sector should make serious efforts to alleviate this shortage.
4.2.3 The Clerical and Admin Workers Category
The critical skills in demand in terms of having a double-digit percentage level of demand associated with
them, in descending order from the highest to the lowest, are outbound contact centre consultant, insurance
claims administrator, statistical clerk, and insurance loss adjuster. It is towards these critical skills that both
the insurance sector and the INSETA should direct its’ intervention efforts.
The top 10 skills in demand in this occupational category have been outlined. It is important to note that skills
categories such as insurance investigator and insurance loss adjuster are regarded as professional skills
within the insurance sector and the INSETA is in the process of approaching the DHET to have these skills
reclassified.
Table 4-10: Top 10 critical skills in the clerical worker category
Ranking
Subcategory
OFO
2014
Code
2014
Percentage
1
541102
108
42.35%
2
552305
38
14.90%
3
552304
32
12.55%
4
599602
26
10.20%
5
541101
22
8.63%
6
599601
8
3.14%
7
599603
6
2.35%
8
Program or Project Administrators (Skill Level 3)
511102
3
1.18%
9
511201
2
0.78%
10
Call or Contact Centre Agent (Skill Level 1)
541401
2
0.78%
(INSETA ATR 2013)
Page 130
4.2.4 Summary of Scarce and Critical Skills Reported
Interestingly, what the percentage distributions of the critical skills reveal is that for the following organising
framework for occupations’ categories, viz. management, professionals, and clerical and admin workers
categories, there is a wide range of critical skills identified with relatively moderate and low percentage values
together with one relatively high percentage value. This indicates that a number of critical skills have been
identified but the demand for them is low. A cut-off approach should be adopted where only double-digit
percentage values in relation to critical skills should be considered to be of value. It is worth noting that only
with respect to the sales workers category, there is only one occupational category with a double-digit
percentage demand, viz. insurance agent. .
The bulk of people enters sales and clerical work, but has a misconception about the industry. The efforts of
stakeholders are in the four categories described above, more so in the clerical and professional categories,
in order to address the need. Based on the information on profiling the sector (discussed in Chapter 1), youth
provide an adequate supply of labour. Stakeholder interviews confirm that there are fewer people actually left
in the sector to transfer technical skills to the youth. A possible mentorship project would be required to
address this issue.
So why do we still have such a scarcity of skills? This probably stems from the schooling system where there
is an insufficient supply from the General Education and Training (GET) and the Higher Education and
Training (HET) educational systems with the necessary skills and ability. In addition, career guidance is not
carried out widely or often enough. It is also not targeting the right level of scholars. If scholars are not
educated about the insurance sector, how can they choose the insurance industry as a career choice? More
active participation and partnership is required by SETAs, government agencies, insurance industry bodies,
and businesses in order to prompt scholars to think about entering the sector.
Based on the 2012 data received from the employers sampled, the sales workers category demonstrates that
there is a demand for insurance agents and insurance underwriters with the necessary critical skills in
engineering, health care, insurance or risk management, and technical underwriting. Therefore, the INSETA
must be instrumental in developing the sales workers category. Based on the drivers of change discussed in
Chapter 2, it is anticipated that the demand for skills in the sales workers and clerical and admin workers
categories will further increase over the longer term up to 2020.
As an occupational category, professional tends to be high on the list of scarce skills demanded by the
industry. Professionals, as a category of scarce skills, are directly aligned with the skills that are in demand in
the professionals’ category. However, the areas of specialisation required must be noted with regard to skills
development interventions. Areas of specialisation in high demand include insurance brokers, developer
programmers, actuaries, and financial investment advisors.
In prior years, investment in training and development of individuals in the management and professionals
categories has worked well to shift the level of scarcity of these skills further down the list. This directly
correlates with the level of demand shown earlier on.
Professionals are the scarcest occupational category. This validates the demand for professionals such as
insurance brokers, actuaries, and ICT business analysts. The INSETA must therefore be instrumental in
developing this category. Based on the drivers of change discussed in Chapter 2, it is anticipated that the
demand for skills in the professional category will also further increase over the longer term up to 2020.
Page 131
4.3
Critical Skills
4.3.1 Top Prioritised Critical Skills
Prioritised critical skills are identified here. There is an ongoing need for skills training in legislation. Noncompliance with regard to legislation has adverse effects and the consequences are discussed here.
Compromising on legislation related to climate change affects short-term insurance.
The training in skills required by legislation must be a continuing trend, because it is a critical skill required for
financial advisors. The skill needs to be compliant with the Financial Advisory and Intermediary Services Act
(FAIS), 2002 (Act No.37 of 2002) and the Financial Intelligence Centre Act (FICA), 2001 (Act No.38 of 2001)
legislation. Non-compliance with regard to these legislative criteria means that insurance companies run the
real and immediate risk of compromising the employability of people working in the sector. Hence, the impact
on the labour market would be to limit labour supply and unemployment could increase due to the compliancy
issue.
The INSETA must ensure adequate focus and assign priorities to up-skill management. This is particularly so
in relation to climate change, because it impacts on the products and services offered by insurers. Up-skilling
in climate change specialist areas is critical for short-term insurance.
Prioritised critical skills include insurance investment, financial and specialist finance, information and
communications technology and programme developer, underwriting, actuary, loss adjustor, insurance
investigator, leadership and management, customer relationship management, sales, and compliance.
4.3.2 Critical Skills Emerging from the 2020 Landscape
4.3.2.1 Anticipated Critical Skills Required for 2020
Predictive studies have been carried out to identify the critical skills needed up to the year 2020. These fall in
the following areas: the Green Agenda, ageing population, regulation, technological, social media, 2020
landscape, and client centricity. Scarce skills within the insurance sector reside within specific occupational
categories. Skills supply and demand is influenced by the professionalisation of the occupational categories
in the sector. The Department of Environmental Affairs (DEA) has recommended short courses and/or
Professional, Vocational, Technical and Academic Learning (PIVOTAL) programmes for skills level 5, as well
as access and short-course programmes for skills levels 1 to 3 in order to address the stimuli created by the
environmental driver (Department of Environmental Affairs, 2010). The INSETA has a plan in place to
address present and long-term skills shortages.
As previously stated, further research is required to more accurately determine critical skills required up until
2020. Table 4-11 below summarises the work done to date and it is critical that actions are put in place to
prepare for the development of these skills for 2020.
Page 132
Table 4-11: Critical skills required
Critical Skills Focus Areas
Comments on Required Skills per Known Occupation
The Green Agenda
Top
&
senior
management
should
have
a
good
understanding of the changing landscape & the impact of
legislation, & ensure that the rest of the affected staff within
the organisation has sufficient training & information to
consider the impact on their respective studies.
Specifically, the DEA (July 2010) has recommended
crosscutting programmes: critical skills that fit the needs
created by the environmental driver (see the note on these
cross-cutting programmes in the paragraph below this
table).
The aging population
Knowledge & skills to determine the impact of aging on the
insurance industry are required at senior & actuarial level.
Regulation
Financial staff should have the knowledge & skills to
effectively manage income & expenditure in accordance
with new legislation & changing regulations.
Legal staff should know the entire regulation landscape &
should advise on the implementation of new regulations.
Small & micro companies need assistance with business,
financial & risk management skills, as these have been
highlighted as areas of concern.
Technological
Changing technology will have a profound impact on the
entire industry & it is therefore essential that all staff
members
dealing
with
technology
have
sufficient
understanding, confidence, & capacity to deal with it.
Social media
Since most employees use social media, they should have
a basic understanding of the power, security, and
application of social media.
All supervisory & management staff should understand & be
competent to deal with the impact of social media.
Public relations staff should also know how to deal with
positive & negative feedback through social networks.
Top & senior management should have the knowledge &
competency to effectively integrate social media strategies
with the corporate strategy of the company.
The 2020 landscape
Throughout the insurance industry, awareness should be
created of the rapid changes towards 2020. The impact of
these changes on the workforce & all key stakeholders
should be communicated.
Client centricity
Broader consumer awareness, education & protection
should be part of the training offered.
Recommended Cross-Cutting Programmes: Critical Skills
Short courses and/or PIVOTAL programmes for skill level 5: directors, chief executive officers (CEOs),
managers, actuaries, statisticians, modellers, financial investment advisors and managers, and marketing
advisors and managers. These would include the following.
x
Environmental risk and vulnerability assessment, modelling and mitigation planning.
x
Natural disasters: prediction, prevention, management, and disaster impact reduction.
x
Climate change risk and opportunity assessment.
x
Environment and sustainability practices and risk reduction.
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x
Sustainability reporting.
x
Environmental policy, legislation and bylaws.
x
Access and short-course programmes for skill levels 1 to 3.
x
Alien invasive clearing, coastal zone protection, and disaster reduction environmental practices
training (e.g. water wise and fire contractor training).
x
Fire and disaster management workers.
x
Wetland and riverine rehabilitation worker training for flood damage control and water security.
The DEA has proposed programmes to address the scarcity of required skills because of the need created by
the environmental driver (Department of Environmental Affairs, 2010).
Need for Bursaries and PIVOTAL Programmes
The DEA has indicated a skills shortage in the following areas, which are shared as similar skills interests for
the insurance sector because of their direct impact on the industry:
x
Environmental economists and natural-resource economists
x
Climate change specialists and long-range modellers
x
Environmental risk assessors (with integrated and adaptive environmental management expertise)
x
Disaster managers with sustainability management skills
(Department of Environmental Affairs, 2010)
Planning Towards the Implementation of Scarce and Critical Skills in PIVOTAL Programmes
and 2014-2015 for large and medium companies
Number
2013-2014
Percentage
of Total
Number
Percentage
of Total
2014-2015
1 238
49.32%
664
1
0.04%
1
0.03
Managers
137
5.46%
364
14.24
Professionals
289
11.51%
493
19.29
Sales workers
575
22.91%
76
2.97
270
10.76%
957
37.45
Elementary workers
25.98
2555
and 2014-2015 for small companies
Number
Percentage
of Total
Number
2014-2015
Percentage
of Total
62
25.94%
240
57.69
Elementary workers
10
4.18%
4
0.96
1
0.42%
1
0.24
Managers
30
12.55%
104
25.00
Professionals
98
41.00%
60
14.42
Sales workers
38
15.90%
7
1.68
Plant & Machinery operators & assemblers
416
It can be seen from Table 4-1212 that the number of employees that INSETA stakeholders are going to train for
PIVOTAL grants within large and medium companies for 2013-2014, in descending order from the highest
number/percentage to the lowest number/percentage, are the following: clerical and administrative workers
followed, sales workers, professionals, technicians and trade workers, managers, and finally, elementary
workers. Significant occupational categories are those expressed in double-digit percentages, viz. clerical and
admin workers, sales workers, professionals, and technicians and trade Workers. It can also be seen from Table
4-1212 that the number of employees that INSETA stakeholders are going to train for PIVOTAL grants within
large and medium companies for 2014-2015 , in descending order from the highest number/percentage to the
lowest number/percentage, are the following: technicians & trade workers, followed by clerical & admin workers,
followed by professionals, managers, sales workers and elementary workers. Significant occupational categories
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are those expressed in double-digit percentages, viz. technicians & trade workers, clerical & admin workers,
professionals, and managers.
For small companies it can be seen from Table 4-1313 that the number of employees that INSETA stakeholders
are going to train for PIVOTAL grants within small companies for 2013-2014, in descending order from the
highest number/percentage to the lowest number/percentage, are the following: professionals, clerical and
administrative workers, sales workers, managers, elementary workers, and machinery operators and drivers.
For small companies it can be seen from Table 4-1313 that the number of employees that INSETA stakeholders
are going to train for PIVOTAL grants within small companies for 2014-2015, in descending order from the
highest number/percentage to the lowest number/percentage, are the following: clerical & admin workers,
managers, professionals, sales workers, elementary workers, and finally, plant & machinery operators and
assembers. It is clear that the needs of large and small companies differ with respect to training their employees
in relation to the greater or lesser usage of particular occupational categories, using the opportunities which are
provided from PIVOTAL grants.
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In June 2012, the INSETA requested the insurance sector to gear towards planning for training of management
and staff in PIVOTAL programmes. The proposed draft regulations on “monies received by SETAs and related
matters” have not been promulgated yet, but this is envisaged to become a part of the SETA system in 2013. In
doing so, the INSETA has requested employers to plan to participate in the PIVOTAL grant scheme, which will
see 10% of employers’ levies going toward this fund for training and development of employed or unemployed
people at Further Education and Training (FET) institutions and Higher Education and Training (HET) institutions
as well as universities of technology.
4.4
Concluding Remarks
This chapter reviewed scarce skills by occupational class, by looking at professionals, managers, clerical and
admin workers, and sales workers. The scarce skills list is examined from the perspective of occupations and
scarce and critical skills. A review of critical skills for 2014 is done from the perspective of the above four
broad OFO categories, where demand for occupational categories is expressed both in terms of a count as
well as in terms of a percentage. Top prioritised scarce skills are looked at from the perspective of the
ongoing need for skills training in legislation. Anticipated critical skills required up to 2020 are reviewed from a
number of vantage points: the Green Agenda, ageing population, regulation, technological, social media, and
client centricity. This is linked to critical skills per known occupation. For example, the Green Agenda’s needs
for critical skills means that top and senior management must have an understanding of the changing
landscape and the impact of the new legislation.
The scarce skills in the sector remain within the occupational categories of professionals, managers, clerical
and admin workers, sales staff, and technicians. The increase in the professional standard of occupations in
the insurance and related-services industry has a significant impact on the supply of skills in accordance with
demand. Despite the challenges, the INSETA is well prepared to proactively address the current and longterm skills shortages and requirements.
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CHAPTER 5
Strategic Development
5.1
Relevance of National Development Plans, Policy Documents and
Government Priorities for INSETA’s Sector Skills Plan
It is highlighted in this chapter and the one following
that all of the following legislation, viz. Skills
Development Act, National Skills Development
Strategy III, the New Growth Path Framework, the
National Development Plan and the Human
Resource Development Strategy for South Africa
(HRD-SA) 2010-2030 shape the design of our
Sector Skills Plan, Strategic Framework, and Annual
Performance Plan. All of the above pieces of
legislation influence the content of the INSETA’s
Sector Skills Plan in the following ways: the
inclusion, nature, and types of occupation-based
learning programmes and learnerships to be
included in our project plan and the implementation
thereof. In addition, the skills development act directs the Sector Skills Plan to focus on the type of institutions
and professional bodies that we must direct our partnering efforts towards.
The Skills Development Act also has practical implications of the delivery of our skills programmes because
only training providers who are registered with the relevant education and training quality assurance (ETQA
division) will be allowed to deliver these skills programmes.
Some of the strategic goals of the National Development Path shape the activities that our Sector Skills Plan
directs our constituencies to in the insurance sector. Specifically focusing on enhancing the potential of
people, promoting increased employment, attaining economic well-being and equity, the lofty objective of
creating a more inclusive South African society, and critical actions to alleviate poverty and unemployment in
South Africa, e.g. public employment schemes.
The National Development Path and the HRD-SA 2010-2030, have overlapping strategic goals specifically in
the areas of poverty and unemployment, economic growth, and equity. All these goals impact on our sector
skills plan in multiple ways: directing our Strategic Framework and Annual Performance Plan to training
programmes, which have practical utility and can lead to increased employment, and applications for
learnerships, internships, bursaries, and skills programmes are evaluated in terms of equity determinants.
Furthermore the HRD-SA, directs the focus of our Sector Skills Plan that highlights the direction of SETA’s in
terms of looking at the supply and demand for labour through increasing access to education and training.
The strategic objectives of the National Skills Development Strategy III, in particular, direct the focal points of
our Sector Skills Plan.
Our Sector Skills Plan contributes towards fulfilling National as well as INSETA mandates. The INSETA
Sector Skills Plan also provides guidelines and recommendations about the mechanisms for implementing
INSETA’s 4 primary programmes: research and benchmarking; youth education and development;
addressing the need for scarce and critical skills; and small and micro-enterprise development.
All the strategic goals of the National Skills Development Strategy III, direct the direction, content plans, and
action areas of the INSETA’s Sector Skills Plan, viz.
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x
strategic goal 1, a credible institutional mechanism for skills planning;
x
strategic goal 2, access to occupationally directed programmes;
x
strategic goal 3, better use of workplace-based skills development;
x
strategic goal 4, training and support provided to sector co-operatives, small enterprises and nongovernmental organizations; and
x
strategic goal 5, building career and occupational guidance.
All these goals, both singularly and in some instances together, direct INSETA’s four key primary
programmes referred to above (Cf. to the fifth paragraph on p. 150 above). The goals of the National Skills
Development Strategy III, as reflected in our Sector Skills Plan shape our Strategic Framework from 20132016.
In chapter 6, it is argued and demonstrated that our Sector Skills Plan operationally assists with the
achievement of the strategic goals of the National Skills Development Strategy III. It does this in unique ways
for each of above-mentioned strategic goals. It is argued in this chapter that the Sector Skills Plan lends
practical import to strategic goal 2, increased access to occupationally directed programmes through various
vehicles competency on learnerships, internships and work-based programmes. It is contended in the same
chapter that our sector skills plan imparts vital substance to strategic goal 3 – better use of workplace based
skills development through various projects such as the Business & System Analysis. Year 13 Quality
Council for Trade and Occupations pilot underwrites, INSETA National Skills Broker Network and
employment portal and Small Medium Micro Enterprise projects, all of which are geared towards alleviating
scarce and critical skill shortages, and alleviating unemployment. It is also maintained that INSETA
contributes to the burial society movement and in turn to strategic goal 4, training, and support provided to
sector cooperatives, small enterprises, and non –governmental organizations. This is achieved through the
measurement of target variables; identifying relevant recent legislation that is relevant to burial societies and
stokvels and encouraging its implementation, and finally, our sector skills plan establishes strategically in
which geographical regions the presence of burial societies needs to be increased. Our sector skills plan also
contributes to strategic goal 5 – building career and vocational guidance. This is achieved through our plan
adopting a multifaceted approach to career and vocational guidance by doing an empirical analysis of the
various elements. The sector skills plan needs to evaluate the current career guidance calendar and make an
appraisal whether additional items need to be added. In addition, our sector skills plan needs to evaluate the
statistics and trends from goal 4.8, career paths are mapped to qualifications in all sectors and subsectors
and are communicated effectively. The sector skills plan must identify the relevant elements of the legislative
framework and incorporate this into the current strategic plan. This includes the Skills Development Act and
the National Qualifications Framework. The same plan also analyses other aspects of legislation, viz. the
Presidential Infrastructural Plan that directs the action plan of the strategic plan. It is also demonstrated in
Chapter 6 that the Presidential Infrastructure Coordinating Commission (PICC) Infrastructure plan have
relevance for some of our projects. It is also shown in the same chapter that aspects of strategic integrated
project 14 could be integrated into our professional. Academic, technical and vocational (PIVOTAL) grants
programmes.
The national skills accord has bearing on the following INSETA projects, viz. learnerships 2014; internship
2014
Employment Equity and the Black Economic Empowerment scorecard direct the intervention strategy of our
Sector Skills Plan with respect to scarce and critical skills.
Several of the INSETA projects are geared towards addressing transformational issues. Qualifying criteria for
learnerships take cognizance of key transformational imperatives. All of our discretionary grant programmes
must comply with the key developmental and transformational imperatives of the national skills development
strategy, viz. equity profile, class, and geography. Black economic empowerment and the Financial Sector
Charter drive the transformation of our Sector. INSETA needs to support small Black business because of the
poor state of transformation in this area that is exacerbated by structural barriers to entry. Concerted efforts
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and substantial resources are needed to support small black business. One of the key pillars, which our
current Human Capital Project for the insurance industry is investigating, is transformation.
Our seta has made inroads in the rural events through various career guidance events. A statistic worth citing is
84.2% where these career guidance events are held are in the rural areas and 15.7% of them are in the urban
areas.
5.2
Sector skills plan objectives determine programmes in the Inseta
strategic plan
The Inseta Sector Skills Plan also provides guidelines and recommendations about the mechanisms for
implementing Inseta’s 4 primary programmes: research and benchmarking; youth education and development;
addressing the need for scarce and critical skills;and small and micro-enterprise development and which are
included in Inseta’s strategic plan. The skills development act also directs the Sector Skills Plan to focus on the
type of institutions and professional bodies that we must direct our partnering efforts towards, which in turn are
included in our Strategic Plan. The objectives of our Inseta sector skills plan originate in the main from the
National Skills Development Strategy III, which is the chief determinant of the types of occupation-based
learning programmes and learnerships to be included in our Strategic Plan and our project plan which forms part
of the SSP. Pertinent South African legislation influences on a pragmatic level the types of learning programmes
(aligned to the objectives of this legislation that will be offered to our constituent stakeholders – this is reflected
in the Strategic Plan. The Sector Skills plan activates and operationalizes the legislative framework principles of
NSDS III , by making recommendations and interpretations about the manner in which the strategic goals of this
framework must be concretized and implemented in the strategic plan. The Sector Skills Plan specifies the level
and extent of transformational criteria in terms of the Employment Equity Act, Black Economic Empowerment
and the Financial Sector Charter that must be applied to programmes which are included in the Inseta Strategic
Plan. The SSP is the catalyst for the development of the INSETA’s Annual Strategic Plan. By arriving at the
current situation and the future requirements for the insurance sector, a basis is established for the creation of
the Strategic Plan. The SSP is inextricably linked to the Annual Strategic Plan, which prioritises the need to
strengthen the skills and human resources base. The SSP provides an essential background for the
contextualisation of the INSETA’s Strategic Plan. The previous chapters provided the information and analysis of
the current situation and the future requirements, and thus enables a response in the form of a strategic
framework that is realistic, consistent with national priorities and reasonably achievable
The INSETA’s mandate and functions are to perform in accordance with the Skills Development Act (SDA),
the Skills Development Levies Act (SDLA), the Public Finance Management Act (PFMA), and all other
relevant legislature, such as the National Skills Development Strategy III (NSDS), the New Growth Path
(NGP) Framework, the National Development Plan (NDP), and the Human Resource Development Strategy
for South Africa (HRD-SA) 2010-2030. The INSETA must also:
x
Develop a Sector Skills Plan (SSP);
x
Implement its SSP;
x
Promote occupation-based learning programmes;
x
Register agreements for learning programmes;
x
Support and form partnerships with other agencies on matters related to skills development;
x
Collect and disburse the skills development levies;
x
Submit to the director general any budget and financial information to prepare the PFMA;
x
. Improve information about skills development and placement opportunities;
x
Formulate policies and procedures of the Sector Education Training Authority (SETA);
x
Appoint the employees necessary to perform the required tasks and functions;
x
Promote the national standards; and
x
Perform all other duties relevant to the sector and outlined by the legislation, the SDA and the
SDLA.
The SSP has been developed in alignment with the objectives and goals of the INSETA’s strategic framework
and Annual Performance Plan (APP), whose strategic goals are, in turn, based on the strategic goals of the
NSDS III. Furthermore, the SSP is aligned to the strategic goals of the NGP Framework, the NDP, and the
HRD-SA 2010-2030. The strategic goals of these strategies are outlined below.
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On a National level, the main objectives of growth and development strategies are to reduce unemployment,
reduce poverty, and reduce inequality and increase social cohesion. The NGP Framework has the same
above objectives. The framework aims to set out critical points or markers for employment creation and
growth, as well as identify viable ways to create a more inclusive and greener economy in the medium to long
term. This framework sets out to achieve these objectives by providing macro-economic and micro-economic
interventions as well as identifying potential job drivers.
The NDP has outlined the following strategic goals:
x
Focusing on key capabilities of people and the state;
x
Building a capable and developmental state;
x
Bringing about faster economic growth, higher investment and greater labour absorption;
x
Promoting active citizenry to strengthen development, democracy and accountability;
x
Uniting all South Africans around a common programme to achieve prosperity and equity
x
Encouraging strong leadership throughout society to work together to solve problems.
The aim of the NDP is to accelerate progress, deepen democracy, and build a more inclusive South African
society. The plan provides key action to be undertaken to reduce unemployment and poverty in South Africa.
Some of these actions include introducing more active labour market policies and incentives to grow
employment, expanding the public employment programmes, strengthening primary health care services and
health programmes, expanding welfare services and public employment schemes, improving quality of
education, promoting mixed housing strategies, and investing in public transport.
The HRD-SA 2010-2030 sets out the following strategic goals:
x
x
To urgently and substantively reduce the scourges of poverty and unemployment in South Africa;
To substantively improve national economic growth and development through improved;
competitiveness of the South African economy; and
x
To promote justice and social cohesion through improved equity in the provision and outcomes of
education and skills development programmes.
The main aims of the HRD-SA are to accelerate development to match the supply and demand for human
resources and improve the skills in the workforce. These aims are achieved through the implementation of
the key actions of increasing the quality of education and access to training, and raising the return on
investment in training.
How does INSETA achieve its’ strategic objectives?
The INSETA’s strategic objectives are linked to the above through commitment to increased training
opportunities and job creation in the sector as well as building career guidance and skills development
through access to programmes and Further Education and Training (FET) courses. Through these actions,
the INSETA is assisting to reduce unemployment, poverty, and inequality in South Africa. In order to do this,
the INSETA has aligned its’ strategic objectives directly with the NSDS III. The objectives of the NSDS III flow
directly from the GDP Framework, the NDP and the HRD-SA 2010-2030, with the NSDS III providing the
framework for how the objectives outlined in the above strategies will be achieved (with respect to skills
development). The strategic objectives of the NSDS III are:
x
Establishing a credible institutional mechanism for skills planning;
x
Increasing access to occupationally directed programmes;
x
Addressing the low level of youth and adult language and numeracy skills to enable additional
training;
x
Promoting the growth of a public FET college system that is responsive to the sector, as well as to
local, regional and national skills needs and priorities;
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x
x
Encouraging better use of workplace-based skills development;
Encouraging and supporting co-operatives, small enterprises, worker initiated, non-governmental
organisation (NGO) and community training initiatives;
x
Increasing public sector capacity for improved service delivery and supporting the building of a
developmental state; and
x
Building career and vocational guidance.
The INSETA has incorporated these objectives into both the strategic framework (SF)and the APPs. These
plans include another objective that is organisational effectiveness. This objective has been included to
improve the organisational effectiveness of the INSETA, which in turn, will assist in the achievement of the
other strategic objectives, which are:
x
Establishing a credible institutional mechanism for skills planning in the sector.
x
Increased access to occupationally directed programmes.
x
Promoting the growth of a public FET college system that is responsive to sector, local, regional and
national skills needs and priorities.
x
x
Encouraging better use of workplace-based skills development.
Encouraging and supporting co-operatives, small enterprises, worker initiated, NGO and community
training initiatives.
x
The National strategies and the relationship and influence on the objectives of the INSETA are outlined in the
figure below. Furthermore, the SSP has been developed to fulfil the National mandates as well as the
mandate of INSETA.
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Main Strategic objectives
NGP
HRD-SA
NDP
Reduce unemployment
Reduce poverty
Reduce inequality
NSDS III
Main strategic objectives
-
Establishing a credible institutional mechanism for skills planning.
Increasing access to occupationally-directed programmes.
Addressing the low level of youth and adult language and numeracy skills
to enable additional training.
Promoting the growth of a public FET college system that is responsive to
sector, local, regional and national skills needs and priorities .
Encouraging and supporting co-operatives, small enterprises, worker
initiated, NGO and community training initiatives.
Increasing public sector capacity for improved service delivery and
supporting the building of a developmental state.
Main strategic objectives
INSETA APP
-
INSETA SF
-
INSETA SSP
Establishing a credible institutional mechanism for skills planning in the
sector.
Increasing access to occupationally-directed programmes.
Addressing the low level of youth and adult language and numeracy skills
to enable additional training.
Promoting the growth of a public FET college system that is responsive to
sector, local, regional and national skills needs and priorities.
Encouraging and supporting cooperatives, small enterprises, worker
initiated, NGO and community training initiatives.
Increasing public sector capacity for improved service delivery and
supporting the building of a developmental state
Programmes
-
Programme 1: Research and Benchmarking
Programme 2: Youth Education and Development
Programme 3: Addressing the Need for Scarce and Critical Skills
Programme 4: Small and Micro-enterprise Development
Figure 5-1: Diagrammatic representation of policies and frameworks in relation to skills development
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From the above analysis, it is clear that the development of the SSP is aligned not only with the INSETA’s
APP and Strategic Plan, but also with the national imperatives of the NSDS III, the NGP Framework, the NDP
and the HRD-SA 2010-2030. In essence, the development of the SPP flows directly from the objectives
outlined in the above strategies. The INSETA’s Annual Performance Plan
The INSETA’s APP sets out the INSETA’s commitment to implementing the INSETA’s strategic goals that are
linked to the NSDS III. The purpose of this APP is to set out what INSETA intends to do in the upcoming
financial year and during the Medium-Term Strategic Framework (MTSF) to implement its Strategic Plan. The
2013/14 annual targets are ambitious and are reflective of the Department of Higher Education and Training
(DHET) and the Minister’s expectation of SETAs and the INSETA in particular. Understanding the sector is
critical as it provides the context in which the INSETA enables skills development. The key to providing
relevant and impactful skills development interventions is to ensure they meet the scarce and critical skills
needs of the sector. This means having insight into the constraints and opportunities of labour supply into and
across the sector, as well as into the provision and factors affecting the supply of skills.
Given the INSETA’s resource constraints, prioritising scarce and critical skills will enable the INSETA to focus
on where the maximum impact will be gained. All of this requires close partnerships with stakeholders across
the sector and monitoring the impact and progress towards the strategic goals. Alignment of the INSETA’s
Strategic Plan to the Sector Skills Plan
The purpose of the SSP is outlined here. This ranges from the training that is being contemplated by the
insurance sector to serving as a catalyst for the transformation of the sector. Additional goals of the SSP
extend from integrating information obtained from the previous chapters to the creation of a list of scarce
skills.
The SSP is the catalyst for the development of the INSETA’s Annual Strategic Plan. By arriving at the current
situation and the future requirements for the insurance sector, a basis is established for the creation of the
Strategic Plan. The strategy aims of the SSP are discussed in this section. These range from strategies to
realise NSDS III objectives and targets to strategies for handling contractions and expansions in the
insurance sector. This section also embodies stakeholder consultation that contributes to the development of
the SF.
The SSP is inextricably linked to the Annual Strategic Plan, which prioritises the need to strengthen the skills
and human resources base. The INSETA’s strategy is linked with the government’s strategic objectives
adopted as the MSTF, where one of the strategic priorities is to strengthen the skills and human resources
base. The INSETA SSP is a document that identifies the skills needs of the insurance sector and reports on
the training planned. It also examines the concepts of employment, skills, and qualifications from a broader
point of view. The plan serves to identify the industry dynamics that drive the sector. The SSP presents itself
as a tool, which the INSETA can use to track its own progress in terms of addressing skills shortages and
supporting transformation in the insurance sector.
Thus, the INSETA SSP aims to:
x
Draw together the information collected in all previous chapters;
x
Analyse the implications of this information for skills needs in the sector;
x
Reflect on any additional research to establish skills needs; and
x
Include a scarce skills list.
The SSP provides an essential background for the contextualisation of the INSETA’s Strategic Plan. The
previous chapters provided the information and analysis of the current situation and the future requirements,
and thus enable a response in the form of an SF that is realistic, consistent with national priorities and
reasonably achievable. This chapter, therefore, provides the framework for the Annual Strategic Plan.
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The strategic aims of the SSP are to:
x
Formulate strategies for achieving the NSDS III objectives and targets;
x
Formulate strategies for ensuring that workers and prospective workers (new labour market
entrants) are appropriately skilled and thus employable;
x
Formulate strategies for meeting the needs of employers with respect to the skills of their current
workforce as well as the skills of new entrants into the labour market;
x
Provide guidance and incentives to ensure that investments in skills development are aligned with
the gaps identified in the previous sections;
x
Provide quality skills development within the sector in respect of the Occupational Learning System,
and the implementation, management and monitoring of regulated learning programmes; and
x
Formulate strategies for responding to fluctuations in the sector, such as periods of significant
expansion or contractions or fluctuations within particular industries.
The strategic objectives that both the APP and the SF are based on also form the basis for the SSP’s
objectives and outcomes-based programmes. These objectives along with the programmes that fulfil the
mandate of the INSETA are discussed below. The INSETA’s Skills Development Priorities linked to National
Skills Development Strategy III Outcomes
The strategic goals of the INSETA are based on the NSDS III strategic objectives. These six strategic
outcomes-orientated goals are viewed as critical for realising the INSETA’s mandate. These objectives are
realised through four programmes. These programmes are:
x
Programme 1: Research and Benchmarking
x
Programme 2: Youth education and Development
x
Programme 3: Addressing the Need for Scarce and Critical Skills
x
Programme 4: Small and Micro-enterprise Development
The interventions within each programme above are funded through the DHET setup skills development levy
system, as mentioned in Chapter 1.
5.2.1 Strategic Goal 1: A Credible Institutional Mechanism for Skills Planning
(NSDS III 4.1) Performance Indicators and Targets
This programme aims to provide the INSETA Board and staff, the insurance and related-services sector and
stakeholders with information related to trends and best practice (local and international), pertinent to the
insurance supply and demand for skills, education, training and development. Five strategic objectives
support Strategic Goal 1 as follows:
x
Research the sector profile
x
Determine supply and demand of skills in the sector
x
Identify priority scarce and critical skills for the sector
x
Identify implementable interventions that will address the skills shortages
x
Disseminate research findings to stakeholders
The INSETA’s Programme 1: Research and Benchmarking
This programme focuses on the need for credible research that will be the basis for inputs to the SSP with
regard to skills. Strategic objectives have been defined to realise the goal of an institutional mechanism for
skills planning – Strategic Goal 1. There are two risks associated with this goal, as discussed below. The
responsible office for this goal is indicated and the resource considerations are outlined. The three objectives
that will be the impetus for skills development planning and implementation are also outlined here. Satisfying
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these objectives will give rise to applicable programmes. Research projects to be implemented extend from
National Health Insurance (NHI) to compliance issues that are affecting the insurance industry.
Five strategic objectives have been defined to realise this strategic goal (Strategic Goal 1: A Credible
Institutional Mechanism for Skills Planning): research sector profile; determining supply and demand of skills
in the sector; identifying priority, scarce and critical skills for the sector; identifying implementable
interventions that will address the shortages; and disseminating research findings to stakeholders. There are
two risks attached to this: the first is that stakeholders resist providing additional information outside of the
compliance requirements and the second is the reputational risk, due to the intended target market not
perceiving the research and benchmarking as credible and authentic.
One project initiated during the 2012/2013 financial year is the SSP 2012 project, which responds to the
INSETA’s mandate to conduct research to highlight current and future supply and demand for skills, including
information relating to trends and best practice that is of value to the insurance and related-services sector.
The INSETA is solidly placed to act as a neutral resource within the insurance sector, which allows it to
represent all its subsectors and stakeholders in the production and dissemination of research data and
thereby assisting with the closing of the gap between labour market needs, and skills supply. The costs of
establishing a credible institutional mechanism for skills planning in the sector will be no more than 10% of
the discretionary grant allocation.
Over the next five years, the INSETA will produce credible research that informs the Strategic Plan, with
relevant stakeholder buy-in and approval. The SSP will reflect the current and future supply of and demand
for skills in the insurance and related-services sector.
Three objectives that will be used to inform skills development planning and implementation are:
x
The INSETA develops a credible SSP for the insurance sector.
x
The INSETA conducts credible research, and to a large extent the research agenda is directed by
the gaps identified in the SSP and a research agenda is approved.
x
Additional institutional capacity must be developed in accordance with an approved plan (the
INSETA capacity).
The impact of this will be relevant programmes that are successfully developed and implemented within the
sector. The INSETA plans to address the outcomes of the SSP in Programme 1 through research,
environmental scanning, and needs analysis in some of the following areas:
x
NHI
x
National Social Security Fund (NSSF)
x
Governance
x
Green occupations
x
Micro-insurance
x
Career-guidance research
x
Retail insurance
x
Human capital development in the short-term insurance industry
x
Employability of people with disabilities
x
Regulatory changes that impact the industry
5.2.2 Strategic Goal 2: Access to Occupationally Directed Programmes (NSDS III
4.2) Performance Indicators and Targets
Goal 2 is aimed primarily at post-schooling, pre-employed, tertiary and unemployed youth. Four strategic
objectives support the goal as follows:
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x
Support youth to obtain scarce and critical skills.
x
Assist youth with workplace practical experience and skills.
x
Foster partnerships between education and training institutions. (FET-UOT employers) to provide for
workplace training.
x
Improve access to post-school learning sites, including workplaces.
The aim of Strategic Goal 2: Increased Access to Occupationally directed Programmes is discussed here.
Four strategic objectives have been developed, the risk connected to this goal identified, and the responsible
department named. The costs of reaching this goal are also discussed. The budget allocation to the goals of
career and vocational guidance channels and access to occupationally directed programmes are mentioned.
The applicable INSETA programme and NSDS III indicator are also identified.
Various projects are in place to increase access to occupationally directedoccupationally directed
programmes. The objectives of these projects include the acquisition of sought-after work experience,
assisting learners to obtain relevant qualifications, securing of workplace experience for competent learners,
funding employers for internships, and addressing key transformational imperatives. The targets for these
various projects are also specified. The vehicles through which this laudable goal of increased access to
occupationally directed programmes are achieved is through learnerships, internships, FETI-HETI articulation
project, and funded projects such as the funding of BCom students for various insurance-directed studies.
Provision is also made for the funding of these programmes through the INSETA funded bursaries. The
question about the success of these programmes is addressed in this section.
The criteria applied in order to make an informed decision about this are threefold: not completing the
programme before completion, number of learners completing the programme, and level of placement after
the completion of these programmes. The objective is to provide programmes that primarily have an
insurance focus. All of these programmes have set targeted goals. Internships target learners from the
private sector as well as FET colleges. The support of the FET colleges in the internship initiative is vital.
Both the 2012 and 2013 internships have pre-defined objectives and targets. With learnerships, qualifying
employers can apply for grants. It is indicated here that learnerships have certain qualifying criteria. Both the
2012 and 2013 learnership programmes also have certain pre-defined objectives with set targets – mention is
made of the fact that with regard to the 2013 learnership programme, an accentuated emphasis is placed on
Financial and Advisory Intermediary Services (FAIS) compliance. Learnership projects are spread throughout
the nine provinces. The success of learnerships is determined by how close it approximates its set
achievement criteria – these criteria range from the number of companies hosting the learnerships to the
number of disabled learners accepted into the programmes. Another criterion for measuring the success of
learnerships is the number of learners who have completed learnerships, as reflected on the National Learner
Record Database (NLRD). Completion and placement statistics for learnerships and internships are the
primary determinants of the success of these programmes. By comparing the 2010-2011 internships with the
2011-2012 learnerships, it is possible to see whether there has been an improvement or diminution of
improvement from the perspectives of completion and placement.
There are funded projects for BCom students that started in 2013. The funding is for a year and the expected
date of completion is February 2014. First-year and second-year students are being funded with a corelationship with the National Student Finance Aid Scheme (NSFAS). There is also the funding of both
unemployed and employed learners in the pursuit of BCom studies, where the envisaged completion date is
February 2014, while for some institutions the completion date still has to be established. Both universities
and FET colleges are involved in this initiative. These BCom studies have a bias towards financial planning,
business management and Information Technology (IT) oriented directions. The various institutions have
been allocated varying number of students. The FETI-HETI projects leads to a qualification in wealth
management at Level 5, with the option of pursuing an advanced Management Diploma. This project
experienced a number of challenges ranging from not having the requisite work experience to undertake the
wealth management qualification to the training of the various FET colleges that are not in synergy.
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Budget bursary allocations that sometimes support occupationally directed programmes are discussed below.
Highlights of the FETI-HETI project range from the use of external subject-matter experts to the fact that the
South-Cape College needs to make provision for their learners to undertake the Advanced Management
Diploma in Management as the University of the Western Cape does not make provision for distance
education. Regarding impact, a 77% pass rate is achieved.
R198 656 387 has been allocated to the INSETA’s Strategic Goal 2 and Strategic Goal 5. This amount is
used to fund 14 projects. These goals refer to Indicators 4.2 and 4.8 on the NSDS III. Both these strategic
goals contribute directly to the programme of youth, education, and development.
2013 Internship and Learnership Programmes
These programmes respond to the goal for increased access to occupationally directed programmes, and are
aimed at assisting youth that require work experience for entry into the sector. The impact of this project will
be graduates with sought-after and specialised qualifications responding to the needs of the industry. The
INSETA’s goal over the next five years is to assist 5 000 youth with workplace practical experience.
Internship Programmes
Specifically, the internship projects support graduates and learners with insurance qualifications, who need to
acquire work experience, and learners from public FET colleges doing business qualifications that equire a
component of workplace experience to achieve certification. Although not all are insurance-specific, these
qualifications address sector needs and encourage FET college support and collaboration. Public FETs are
assisted to find workplaces for learners who need practical experience in order to obtain their qualifications.
Qualifying employers within the insurance sector are invited to apply for internship funding grants in terms of
the INSETA internship funding policy.
2013 Internship Programme
This project aims to reach 610 beneficiaries in all nine provinces through the provision of a 12-month
internship programme.
Learnership Programmes
These programmes respond to the goal to increase access to occupationally directedoccupationally directed
programmes by assisting new entrants to qualify into the sector. The impact is that youth are reached in all
nine provinces, including remote areas, where employers can be accessed to host learners for the
workplace-learning component. Learners exit with qualifications that are sought-after and address the skills
needs of the industry. Qualifying employers are invited to apply for learnership grants in terms of the
INSETA’s learnership funding policy towards insurance-specific and cross-sectoral qualifications. Qualifying
criteria takes cognizance of key transformational imperatives of disability, race, gender, class, age and
HIV/AIDS, as well as encouraging employment of learners whilst providing skills and qualifications that meet
labour market needs. The INSETA has recorded a steady increase in the employment rate of learners exiting
its learnership programmes.
2013 Learnership programme
The Year 13 Learnerships Project is aimed at creating a pipeline to up-skill 600 new entrants into the
insurance and related-services sector and to assist 200 employed learners to gain a qualification towards
FAIS compliance, thus giving insurance sector employers an opportunity to address the skills and
qualifications needs of the industry.
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Learnership Project
Learnerships are selected by companies to address scarce skills identified in the sector and in line with
business needs and imperatives. Companies hosted learners in the following provinces: Gauteng, Western
Cape, KwaZulu-Natal, and Eastern Cape. Funding allocated for these learnerships amounted to R 30.7million. The Learnership Project achievements are as follows:
x
57 companies hosted learners in insurance-specific and cross-sectoral learnerships
x
350 employed learners
x
39 unemployed learners
x
108 disabled unemployed learners
There are 20 learners who terminated their learnerships before completion, most of whom did so because
they are offered employment elsewhere. Learners who terminated recorded the challenge of meeting workrelated targets with learning as the main reason for terminations (The INSETA, 2012: 12-13).
The South African Qualifications Authority (SAQA) statistics of the INSETA’s September 2011 bi-annual
upload to the NLRD reflected a decrease in learner numbers from the previous financial year. Our total
submission to the NLRD for the 2011-2012 financial years contained the following number of data records
(data records uploaded to NLRD 1 April 2011 to 31 March 2012), which is a noteworthy achievement when
compared with other years:
x
Learnership enrolment or achievement: 6 243
x
Qualification enrolment or achievement: 22 954
x
Unit standard enrolment or achievement: 2 159 606
(INSETA, 2012:18)
Completion and Employment Statistics for 2012 Learnerships
Below is a summary of the learnerships figures for 2012:
x
Number of learners registered: 1 121
x
Number of learners who terminated before completion: 32
x
Number of learners who completed the learnerships: 640
x
Number of learners who did not get placement: 85
x
Number of learners placed on completion: 555
x
Number of learners still to complete the learnerships: 449
Figure 5-2: Percentage of completion and employment for 2012 learnerships
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5.2.2.1 Project 1: Further Education and Training and Higher Education and Training
Articulation Programme
In 2012, the INSETA completed a pilot project with five public FET colleges in the Western Cape and the
University of the Western Cape (UWC), offering a Wealth Management Level 5 qualification. This is a pilot of
possible collaboration between SETAs, public FET colleges, employers and the university. The Wealth
Management Level 5 qualification is funded and quality assured by the INSETA and is offered through public
FET colleges. Various companies in the insurance sector, including small brokerages, employ learners in this
project. This project saw the successful articulation of a qualification offered by FET colleges into a university.
Some 77 of the 100 employed learners who entered the programme completed it successfully, with 25 of
them now registered to follow the articulation route and to study for an advanced management diploma at the
University of the Western Cape. All the learners who successfully completed this programme are now FAIS
compliant.
Challenges Experienced in the Last Project
x
Recruiting learners that are not working in areas that would give them exposure to activities that
would satisfy qualification requirements.
x
x
Reluctance by some companies to allow learners sufficient time off to attend theoretical training.
Late completion and delivery of logbooks to the workplace, resulting in added pressure on the
learners and workplace mentors.
x
Plagiarism is detected in the submission of the logbook case study and this assignment had to be
redone by the students involved.
x
FET colleges started training delivery three months apart, which caused delays in the project.
Highlights of the Last Project
x
All FET colleges hired external facilitators, who are subject-matter experts, and have been working
in the insurance sector on fixed-term contracts to facilitate the training and assessment. This
allowed FET colleges to be involved in delivering SETA qualifications.
x
All facilitators are registered and accredited assessors with the INSETA and most facilitators are
certified financial planners registered with the Financial Planning Institute (FPI). Seventy-seven
students completed the National Qualification Framework (NQF) Level 5 certificate out of the 100
students enrolled.
x
Twenty students who studied at South Cape College in George are not able to enter the Advanced
Diploma in Management (ADM) studies, as UWC School of Business Finance (SBF) does not offer
distance education and commuting to UWC is not a viable option. This issue still needs to be
resolved.
Impact of the Last Project
Of the 77 students who successfully completed the programme, 25 have enrolled at UWC SBF for the ADM
in 2012.
5.2.2.2 Internship Project
An amount of R18.7 million is allocated for this project. 275 interns are hosted in 58 companies in Gauteng,
Western Cape, KwaZulu-Natal, and Eastern Cape. The INSETA also allocated R1.2 million to a special
project targeting 10 people with intellectual disabilities to be hosted on internships in companies in the
insurance sector to assist them to acquire employment (INSETA, 2012:13).
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Completions and Employment Statistics for 2010 Internships
x
Number of learners registered: 325
x
x
Number of learners who completed the internships: 280
x
x
Figure 5-3: Completions and employments statistics for 2010 internships
Completions and Employment Statistics for 2011 Internships
x
Number of learners registered: 296
x
x
Number of learners who completed the internships: 280
x
x
Figure 5-4: Completion and employment statistics for 2011 internships
By comparing 2010 and 2011 figures for numbers of learners registered, it can be seen that 8.9% more
learners registered for internships during 2010 compared to 2011. By comparing the above years’ figures for
the number of learners who terminated internships before completion, it can be seen that 28.8% less learners
terminated internships during 2011 compared to 2010. By comparing the same years for the number of
learners who completed internships, it can be seen that 94.59% of learners completed their internships in
2011, as opposed to 86.15% of learners during 2010. By comparing the same years for the number of
learners who did not get placement after completing an internship, 27.4% more learners did not receive
placement after completing an internship during 2010 compared to 2011. Finally, by comparing the same
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years for the number of learners, 22.1% more learners are placed on completion of an internship during 2011
compared to 2010 (INSETA Learning Division, 2013).
5.2.2.3 Types of Funded Projects
5.3
SSP objectives and Inseta’s indicative budget
This was determined from the relationship between need established, strategies identified and alignment to
national skills development strategy goals and principles. Indicative budget is arrived at, through the
measurement and satisfying of several criteria: Need established, Method of establishing need – Research
method and data sources (Supply & Demand); Time frame of need; Strategy identified to address specific need;
Prioritized in Strategic Plan; Current Seta Activity/Planned Seta Activity; Measured impact of Seta activity;
Identified delivery partners, Alignment to NSDS goals; Alignment to NSDS priorities; and Indicative budget.
INSETAs funding collaboration with the National Student Financial Aid Scheme of South
Africa.
For 2013, the INSETA has a joint funding venture with the National Student Financial Aid Scheme (NSFAS)
for the funding of BCom learners at Rhodes University and the North-West University. Fifty-three learners are
funded at first and second year levels. R3 308 771 is provided by the INSETA for funding of BCom learners
at Rhodes University and R648 825 will be given to North-West University for the funding of their learners.
Therefore, a total of R3 957 596 is paid to the above two universities by the INSETA (INSETA Bursary
Division, 2013).
Eight institutions are participating in this project during 2013 at a first, second and third (final) year level. The
qualifications range from BCom insurance and financial planning to finance and business management and
IT qualifications. The results are expected during February 2014. The total funding for this project to date is
R6 750 000.
5.3.1 Strategic Goal 3: Better Use of Workplace-Based Skills Development (NSDS
III 4.5) Performance Indicators and Targets
This goal addresses the need for scarce and critical skills as identified in the SSP and through other
research. Two strategic objectives support this goal:
x
Provision of quality programmes that address scarce and critical skills for development of employed
people (at least 5% of the current 106 000 participating employees reported within the SSP will be
supported).
x
Increasing workplace learning.
INSETA’s Programme 3: Scarce and Critical Skills
This programme is linked to Strategic Goal 3: Encouraging Better Use Of Workplace-Based Skills
Development. The focus here is on filling the gaps in relation to scarce and critical skills, and measuring
whether this objective is being achieved through impact studies, which will report on whether the level of
scarce and critical skills is increasing or decreasing.
The INSETA will realise the objectives of this programme by implementing skills development programmes
for people with disabilities and empowering Black managers with insurance knowledge and skills. Other
concerns raised by the insurance sector about scarce and critical skills will be met through strategic
interventions ranging from strategic and innovative thinking to employment equity and Black Economic
Empowerment (BEE) scorecard training.
Better use of workplace-based skills development relates to NSDS III 4.5. In order to achieve Strategic Goal
3, two strategic objectives have been identified, namely the provision of quality programmes that address
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scarce and critical skills for developing employed people, and increasing workplace learning. The one risk
associated with this goal is the low throughput for employed learners.
Resource Considerations
The expenditure for encouraging better use of workplace-based skills development will be targeted at 20% of
the annual discretionary grant allocation.
By collaborating with employers, this outcome will source, identify, and develop programmes for employed
workers that will address the scarce and critical skills required of the workforce in order to adapt to changes
in the labour market. Impact will be measured by reporting on either increased or decreased critical skills
levels over the next five years, which will directly influence the transformation of the sector.
The INSETA plans to address the outcomes of the SSP in Programme 3, through the following:
x
Skills development programmes related to training of people with disabilities. Of the total number of
people employed in the insurance sector, only 1% includes people with disabilities. The learning
division at the INSETA runs a project titled Internships for People with Intellectual Disabilities, where
the NSDS III objective is NSDS III 4.2, the primary sector strategy is youth development, and the
secondary sector strategy is social transformation. The strategic outcome-oriented strategy is to
increase access to occupationally directed programmes of the youth, education and development.
The total funding value for this project is R1 204 000. The starting date is 1 April 2011 and the
project ended on 30 April 2013.
x
Ensuring that the number of Black managers with insurance-specific knowledge and skills progress
in their profession through coaching and mentoring in light of the rapidly ageing workforce of skilled
professionals and managers currently in the sector.
Assessing the concerns raised by the sector in terms of scarce and critical skills, the following skills
interventions are identified as necessary and will need to be prioritised for rollout into the sector:
x
Strategic and innovative thinking
x
Management and leadership training
x
Technical insurance underwriting training
x
Information and Communications Technology (ICT) training relating to cyber security and general
communication tools
x
Green occupations training
x
Social media strategist training
x
Strategic recruitment and selection training
x
Mentorship training
x
Client retention and negotiations training
x
HIV/AIDS training
x
Corporate governance training
x
Employment Equity and BEE scorecard training
5.3.2 Strategic Goal 4: Training and Support Provided to Sector Co-operatives,
Small Enterprises and Non-Governmental Organisations (NSDS III 4.6)
Performance Indicators and Targets
This goal aims to develop and support small and micro enterprises (including co-operatives, non-government
organisations (NGOs) and community-based organisations (CBOs). Over the next five years, the INSETA will
support 4 000 small and micro enterprises (including co-operatives, NGOs and CBOs through skills initiatives
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that strengthen and/or grow their businesses). The strategic objectives support the Small and Micro
Enterprise Programme as follows:
x
Support small, medium and micro-sized enterprises (SMMEs) including NGOs and CBOs through
skills initiatives.
x
Develop a database of national brokers and intermediaries.
INSETA’s Programme 4: Small and Micro-Enterprise Development
This programme is associated with the INSETA’s Strategic Goal 4, namely encouraging and supporting cooperatives, small enterprises, worker-initiated NGOs, and community training initiatives.
One project that forms part of the above strategic-oriented goal is the small- and micro-enterprise Training
Vouchers Project, which addresses the INSETA’s strategy for small and micro-enterprise development
through providing training and support to sector co-operatives, small enterprises and NGOs. The project
promotes skills development initiatives for levy-paying and non-levy-paying sector small enterprises, cooperatives, NGOs and CBOs towards providing skills and improving business acumen over the next five
years. The project also supports non-levy-paying employers and small levy-payers in compliance–related
training and training on full qualifications towards licence retention, such as for FAIS fit-and-proper
compliance.
The stakeholders under the spotlight range from sector small enterprises to community-based organisations.
The programme’s outcome will be realised through:
x
the provision of learnerships and internships,
x
business support,
x
the development of new qualifications for this subsector,
x
the use of business tools for creating a skills broker network,
x
the strengthening of the financial services regulatory environment,
x
other activities for improving compliance, registering cooperatives, regional support in the provinces,
and
x
joint undertakings with small- and micro-enterprises.
Two strategic objectives have been identified to achieve Strategic Goal 4, namely support for small- and
micro-enterprises (including NGOs and CBOs) through skills initiatives, and develop a database of national
brokers and intermediaries.
There is one risk associated with this goal, namely the database on small- and micro-enterprises (including
NGOs and CBOs), is inaccurate.
The table below shows that R 47 085 052 has been allocated and used for the INSETA’s programme of
small- and micro-enterprise development. The NSDS III indicator of relevance here is 4.6. The rand amount
allocation is for the 2012/2013 financial year (INSETA, 2013e).
Table 5-1: Amount allocated to INSETA Small and Micro-Enterprises
NSDS III Strategic Oriented Goal
NSDS
Programme
Indicator
Training & support provided to sector
4.6
Amount
allocated
for
2012/2013 financial year
SME development
R47 085 052
co-operatives, small enterprises &
NGOs
(5 active projects)
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Resource considerations
The expenditure of the strategic goal encouraging and supporting co-operatives, small enterprises, workerinitiated NGOs and community training initiatives will be targeted at 30% of the annual discretionary grant
allocation.
Through partnerships with relevant government funding agencies, support and enabling skills initiatives for
sector small enterprises (both levy and non-levy paying), co-operatives, NGOs and CBOs business acumen
will be improved over the next five years.
INSETA plans to address the outcomes of the SSP in Programme 4 through the following:
x
Increasing opportunities for learners to be placed with SMMEs by providing them with support to
take part in programmes such as learnerships and internships. Business support in terms of working
closely with the micro-insurance sector to assist them to increase professionalism within it.
Recognition of prior learning (RPL) will be crucial here.
x
Business tools: Supporting small brokers through a skills development network, which creates a
platform to identify and prioritise small brokers’ skills needs.
x
The financial services regulatory environment intends to promote the complete professionalisation of
the industry through a variety of measures, which include minimum education requirements, FAIS
compliance, the provision of learning material for regulatory exams (RE), and support seminars to
help small businesses survive by meeting on-going compliance requirements.
x
Other activities are designed to ensure compliance support through skills development initiatives,
including skills programmes, seminars and RPL initiatives.
x
x
Registration support for registering co-operatives, and cooperative support training.
Regional support initiatives to grow the pool and quality of skills in specific provinces, by providing
consumer education and awareness programmes in collaboration with the insurance sector and
FET/Higher Education and Training (HET) partners.
x
Joint ventures and partnerships with insurance sector stakeholders, especially SMMEs.
Partnerships with Burial Societies/Co-operatives Skills Support Project
The INSETA supports and funds this above project where the NSDS III objective is 4.6, where the primary
sector strategy is social transformation, and the secondary sector strategy is SMME development. The
strategic outcome-orientated goal is training and support provided to sector co-operatives and the
programme covered is small- and micro-enterprise Development.
The INSETA has to achieve a target of 200 registered co-operatives by the end of the current financial year
31 March 2013. To date, 148 burial societies have undergone training to register as co-operatives. Therefore,
the shortfall for burial societies to register as cooperatives by the end of the current financial year is 52, but
there is much confidence that this target will be achieved by the required date. In the current financial year,
44 burial societies have registered with the Companies and Intellectual Property Registration Office. Twentyfive of them have undergone the final training for burial societies who have also registered as co-operatives
(Budulwayo, 2012).
The INSETA is still planning to introduce bookkeeping and secretarial skills training to co-operatives.
Of major importance is that burial societies and stokvels are exempted from the provision of having to register
as a financial service provider with a licence, even in the situation where they are offering financial advice or
alternatively, where they are proposing to offer financial advice.
More than 20% of the South African adult population are members of a burial society. This equates to more
than 10 million people that has not escaped government notice (Randburg Sun, 2013:1).
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5.3.3 Strategic Goal 5: Building Career and Vocational Guidance – Performance
Indicators and Targets
Career guides will accurately reflect the career progression and learning pathway opportunities of the
insurance and related-services sector over the next five years. The INSETA will partner with schools, FET
colleges, universities and the South African Qualifications Authority (SAQA) in the roll-out of career guides.
Three objectives support this goal.
x
x
Develop a career guide;
Provide career guidance and development to youth both within the sector and new entrants to the
sector for the next five years; and
x
Forge partnerships with FET Colleges and industry bodies.
The INSETA’s Programme 2: Youth Education and Development
This programme is linked to the INSETA’s Strategic Goal 5 – building career and vocational guidance.
Strategic objectives have been identified and there are two risks associated with it. The department
responsible for this strategic goal and the costs involved are discussed here.
The question of the practical value of career guides is raised here. The new career guides contain the
buzzwords for the concepts espoused by the NQF, viz. career progression and learning pathways. It is
expected that the INSETA will engage with various role players in order to affect the Career Guidance
Outreach programme. The objective is to provide stimulating, applicable, and valuable career guidance.
The INSETA plans to achieve equilibrium and parity with regard to the provision of skills in three ways:
increasing the number of graduates, assisting entry-level entrants and providing work-based experience
programmes.
The practicalities of realising Programme 2 will be manageable through the provision of career guidance and
developmental information, the provision of workplace experience and skills, and working collaboratively with
the DHET and professional bodies.
Effective established career and vocational guidance channels – NSDS III 4.8
In order to achieve Strategic Goal 5, three strategic objectives have been set: to develop a career guide; to
provide career guidance and development to youth both within the sector and for prospective new entrants to
the sector for the next five years; and to forge partnerships with FET colleges and industry bodies.
There are two risks associated with this strategic goal: creating unrealistic expectations of career
opportunities within the sector and the fact that FAIS regulatory requirements, although they improve
professionalism, also potentially create barriers to entry.
A Multifaceted Strategy to Address Career and Vocational Guidance Channels
The INSETA follows this strategy in order to realise career and vocational guidance objectives. In this regard,
the INSETA works closely with SAQA, whose mandate is to bring all SETAs in line with its two-fold approach
for career and vocational guidance. The two components are funding in relation to career and vocational
guidance and their actual standard-sized approach and methodology to career and vocational guidance.
The INSETA career guidance calendar for 2012-2013 is mentioned in this section. The Business Information
(BI) tool for the first three quarters of 2012 is outlined here. This is linked to Goal 4.8. Career Paths are
mapped to qualifications in all sectors and subsectors and communicated effectively, contributing to improved
relevance of training and greater mobility and progression. This BI tool is broken down by the following
variables: name of institution, province, municipality, area, urban/rural, race, gender, youth and citizen status.
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The progress report on the launch of the INSETA Ingwe FET College initiative is discussed in this section.
The reality of what is happening in the Eastern Cape region with the INSETA and the FET colleges compared
to the strategic objectives is discussed here. The deliverables range from when the Memorandum of
Understanding (MoU) is signed to the development of a sector awareness programme for learners in
insurance at the Ingwe FET College, and the SAQA organises a number of communication forums for career
and vocational guidance that are attended by four INSETA members of staff.
Mandela Career Day is one of the initiatives organised by the SAQA. In addition, the SAQA runs a radio
advert promoting various guidance offerings presented by the SETAs. The INSETA will compile and present
its package on career and vocational guidance on the radio.
The INSETA also contributes material to the Khetha career and vocational magazine, where the design and
layout is the responsibility of our public relations partner Rothco. All SETAs contribute to this publication,
which is published annually. Khetha Guide is referred to in the INSETA Career DPS.
The INSETA’s contribution to the publication described in the previous paragraph covered a number of areas:
insurance-specific professions, financial professionals, licensing requirements, the 10 subsectors of
insurance, the breakdown between levy and non-levy paying companies within the insurance sector, what a
learnership is, what an internship is, work-based experience programmes, and a focus on actuarial science.
The INSETA also contributes to the InMAG publication (insurance magazine), which is supported by the
major insurance company role-players. Our SETA buys space in this publication. We receive 10 000 copies
of the magazine to distribute to our learners and stakeholder companies.
We receive ad hoc invitations to visit career guidance exhibitions that we film. Our target is to be present at
three or four career guidance exhibitions spread throughout all nine provinces. In some cases, the INSETA
has to pay for the exhibition stand and space, but this is not always the case.
We monitor the success of learners’ attendance at career guidance days through the completion of the BI tool
for the NSDS III Goal 4.8. This is reflected in the number of schools who attended career guidance days. For
example, in the first quarter of 2012, 80 schools attended career day exhibitions where the INSETA exhibited.
In Quarter 2 of 2012, 38 schools attended career day exhibitions where the INSETA exhibited. The BI tool
breaks down career paths according to the following variables: province, municipality, area, rural/urban and,
more importantly, key development and transformation imperatives according to race, gender, youth and
citizen status (Mabika, 2012).
The INSETA participated in the Finance Week hosted by Sci-Bono from 16 to 20 April 2012. The total
number of learners who attended the focus week is 4 892 learners and 126 educators. The INSETA exhibits
and presents at this week, which is held at the BHP Billiton Career Centre (Sci-Bono, 2012).
The week targets learners around Gauteng from Grades 9 to 12 who are preferably doing mathematics and
science in the FET phase. Grade 9 learners are encouraged to participate in order for them to appreciate the
centrality of the gateway subjects in the hope that they will be persuaded to choose these subjects when they
enter Grade 10.
The INSETA also participated in the fourth Annual Sekhukhune Career Expo 2012, which started on 7 May
2012. According to Annual Sekhukhune Career Expo, the purpose of this expo is to achieve the vision of
Pearl Edu, which is “to develop schools in the rural areas to become centres of excellence by providing the
right exposure, skills, and information by building their capacity to improve the quality of education. Let’s join
forces to empower and uplift learners in the rural areas to become better citizens and leaders of this country”
(Sci-Bono, 2012).
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In conclusion, our career guidance and vocational efforts are monitored and tracked on a regular and
consistent basis. The efforts discussed here are reinforced positively with the assistance of the SAQA
helpline.
Career Guidance Calendar 2012/2013
The INSETA Career Guidance Calendar reflects the career guidance events which took place in 2012 and
those which occurred during the first three months of 2013. There are a wide range of differing events that
comprise a number of different elements, viz. science week, career expos and exhibitions, scarce skills
expos, career days organised under the auspices of the churches, anti-poverty day, world of work career fair,
career events organised by government departments and other SETAs, and career events organised by
universities. These events occurred in a wide range of provinces extending from Gauteng to the Western
Cape. During 2012, these events took place from April to November 2012. During 2013, various skills
planning, development initiatives commenced, and more details of these can be found in the INSETA Annual
Report, which is available on www.INSETA.org.za
In Quarter 1 of 2012, 80 institutions participated by contributing to the above Goal 4.8. All of these institutions
are located in Gauteng. Of the institutions, 72.5% are located in Johannesburg, 25% are located in Tshwane,
and 2.5% are located in Ekurhuleni. Of the participants participating in the career paths events, 97.5% came
from urban areas and 2.5% came from the rural areas. Of the participants, 98.75% are Black and 1.25% are
White, 78.75% are female and 21.25% are male, while 80% are youth. All of the participants are South
African citizens.
Thirty-eight institutions attended career events during Quarter 2 of 2012. Of these institutions, 94.7% are
located in the North-West Province, 44.7% fell within the Greater Taung Municipality, followed by the
Mamusa and Moretele municipalities at 10.52%. Other institutions had low representation within the
remaining municipalities at about 2.63%. Institutions are widespread in a number of different areas with
predominantly low concentrations. However, some institutions had higher concentrations, viz: Taung 18.42%,
Depetlewance Village 10.52%, Pudimoe 10.52%, and Schweizer Reneke at 7.89%. Of these institutions,
84.2% are located in rural areas and 15.7% are situated in turban areas. Of the learners, 8.4% are female
and 31.6% are male. Note: there are 32 missing cases with respect to the variable of gender. The entire
sample is youth and 100% are South African citizens.
During Quarter 3, of 2012, nine institutions participated in career guidance initiatives. All the institutions are
located in Mpumalanga. Of the institutions, 77.7% are located in Bushbuckridge followed by Mbombela with
11.1%; 44.4% of the institutions are located in Agricourt followed by Nelspruit with 22.2%. Of these
institutions, 77.7% are located in rural areas and 22.2% in urban areas. All of the learners are Black. All the
learners are South African citizens.
Goal 4.8 Career Paths are mapped to Qualifications
Seventy-two institutions participated in career guidance during Quarter 4. Of the institutions, 66.6% are
located in Limpopo, 33.3% are located in Gauteng, 52.7% fell within the Capricorn Municipality, 33.3% are
located within Johannesburg Municipality, and 15.2% are located within the Lepelle Nkumpi area. Similarly,
15.2% of these institutions are situated within the Polokwane area. Of these institutions, 8.3% are located
within the Blouberg area, 6.92% are based within the Meadowlands area and the same percentage is found
within the Orlando East area. Of the learners, 52.7% came from the rural areas and 42.7% came from urban
areas. All of the learners are South African citizens. The mean age of the learners is 19.07, and none of
these learners are disabled (INSETA Marketing Division, 2012).
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5.3.4 Strategic Goal 6: Organisational Effectiveness – Performance Indicators and
Targets
This programme aims to improve the operational performance of the INSETA. Over the next five years, the
INSETA will maintain its record of unqualified audits and compliance with legislation. The Organisational
Effectiveness Programme supports three strategic objectives.
5.4
x
Maintain effective corporate governance.
x
Develop and implement a quality management system.
x
Establish an effective supply chain management unit.
Conclusions
It can be seen from the above that the INSETA has a mandate and critical functions that need to be fulfilled.
Its mandate is influenced and impacted upon by various relevant pieces of legislation. The INSETA’s SSP
takes account of its raison d'etre from the INSETA SF and APP.
The purpose of the various national development, growth, and human resources strategies has been
addressed in this chapter.
It has been demonstrated that there is a commonality between the strategic objectives of the NSDS III and
those of the INSETA’s SF and APP.
The NSDS III outcomes are driven by four INSETA programmes, viz. research and benchmarking, youth
education and development, addressing the need for scarce and critical skills, and small and microenterprises development.
Learnership and internships are the practical activators of the programme, viz. youth education and
development. Career and vocational guidance is a primary offshoot of the above programme.
The INSETA programme for small and micro-enterprise development takes its action through partnerships
with burial societies and co-operatives.
The need to do an analysis of scarce and critical skills originates from the NSDS III strategic goal of better
use of workplace-based skills development and is realised through frequency demand studies of such skills
organised around the Organizing Framework for Occupations (OFO).
The strategic goal of organizational effectiveness can be aptly described as a standalone one as it has to do
more with each SETA’s own internal functioning and governance rather than with the relationships with a
SETA’s stakeholders.
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CHAPTER 6
Implementation Plan
This plan incorporates the Insurance Sector
and
Education
and
Training
Authority’s
(INSETA’s) strategic goals to ensure alignment
to the support of organisational strategy and
effectiveness in the implementation of its
projects. This plan will also include other public
Further Education and Training (FET) colleges
that the INSETA had already started working
with.
This
chapter
outlines
how
the
programmes are going to be implemented to
achieve the outcomes of the strategic goals
outlined in the previous chapter.
Because the INSETA has to work with the
educational institutions to achieve some of the goals, and as such the Memoranda of Understanding (MoU)
gives context to these partnerships, this section begins by outlining these MoU before looking at how each
project will be implemented.
6.1
Memoranda of Understanding Reflecting Partnerships
The INSETA, together with Sector Education and Training Authorities (SETAs) who form part of a number of
SETA clusters, has concluded agreements with a number of FET colleges in the North West, Western Cape,
and KwaZulu-Natal. The same group of SETAs is also in the process of concluding agreements with a
number of FET colleges in Mpumalanga.
These agreements are expressed in terms of overarching intentions, national medium-term strategic aims
and supporting the objectives of the cluster. Overarching intentions range from joint planning within the skills
development framework to the aims of the national Medium-Term Strategic Framework (MTSF). The aims of
the national medium-term strategic framework range from creating sustainable livelihoods to strengthening
democratic institutions. Overarching intentions can also include education and training needs to experiential
workplace learning for students.
Programme focus issues range from the value of the programme design and delivery to the development of
joint programme advisory committees.
Supporting objectives range from curriculum and qualification design to assist FET students with access to
work placements.
The dates these agreements are signed are mentioned.
Other partnerships are with SETAs mentioned earlier in this Sector Skills Plan (SSP) on qualifications,
collaborating with the Education, Training and Development Practices (ETDP) SETA and the BANKSETA, in
the development of these. The INSETA also partners with the Fibre Processing and Management (FP&M)
SETA on our disability project, which acts as a judge on our awards for people with disabilities in the sector.
Discussions are also underway with the Wholesale and Retail (W&R) SETA on retail qualifications for the
insurance sector.
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6.1.1 The Following Memoranda of Understanding are concluded or are Still under
Negotiation
The INSETA and the North West Sector Education Training Authority Cluster and Three
North West Further Education and Training Colleges
The INSETA, as part of the North West SETA cluster (representing one of 17 SETAs), has concluded an
MoU with three FET colleges, viz. Vuselela, Taletso and Orbit. Also represented is the FET Directorate of the
Department of Education of the North West Province (North-West Seta Forum Agreement, 2011).
The INSETA and the Western Cape Sector Education Training Authority Cluster and Six
Western Cape Further Education and Training Colleges
The INSETA, as part of 19 SETAs forming the Western Cape SETA cluster, has concluded an MoU with six
FET colleges, viz. Boland College, College of Cape Town, False Bay College, Northlink College, South Cape
College and the West Coast College (Western Cape SETA Forum Agreement, 2010).
The INSETA and the KwaZulu-Natal Sector Education Training Authority Cluster and Nine
KwaZulu-Natal Further Education and Training Colleges
The INSETA, as part of 21 SETAs constituting the KwaZulu-Natal SETA cluster, has entered into a
collaboration agreement with nine FET colleges, viz. Coastal College, Majuba College, Thekwini College,
Elangeni College, Mnambithi College, Umfolozi College, Esayidi College, Thashana College, and the
Umgungundlovu College (KwaZulu-Natal SETA Forum Agreement, 2011).
The primary parties to this framework agreement signed it on 3 August 2011.
The INSETA and the Mpumalanga Sector Education Training Authority Cluster and Three
Norht West Further Education and Training Colleges (Draft Agreement)
The INSETA, as part of the Mpumalanga SETA cluster, is in the throes of concluding an agreement with the
following FET colleges: Mr TT, Gert Sibande College, Nkangala College, and E College (Mpumalanga SETA
Forum Agreement, 2011).
Project Plan Sector Education Training Authority/Public Further Education and Training
Collaboration and Establishing Sector Education Training Authority Offices in the Eastern
Cape Public Further Education and Training Colleges
Skills development is an important tool to:
x
Facilitate seamless pathways of learning that connect FET colleges and the workplace for lifelong
learning; and
x
Extend access to education to rural communities and other categories of marginalised groups to
support the needs of a developmental state.
(INSETA, 2012b)
The INSETA is appointed as a lead SETA for the SETA cluster that will collaborate with the following two
public FETs in the Eastern Cape: Ingwe College in Mount Frere and King Sabata Dalindyebo College. The
following SETAs are appointed as supporting SETAs in this cluster:
x
Services; Construction Education and Training Authority (CETA);
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x
x
Media Information and Communication Technologies Sector and Training Authority (MICT);
Education, Training and Development Practices Sector Education and Training Authority (ETDP
SETA);
x
Culture, Art, Tourism, Hospitality and Sport Education and Training Authority (CATHSSETA);
x
Mining Qualifications Authority (MQA);
x
Manufacturing, Engineering and Related Services Sector Education and Training Authority
(merSETA);
x
Chemical Industries Education & Training Authority (CHIETA);
x
local Government Sector Education and Training Authority (LGSETA) and
x
The Agricultural Sector Education Training Authority (AgriSETA).
The INSETA has already started working with five public FET colleges in the Western Cape, viz. Boland
College, College of Cape Town, False Bay College, Northlink College, and South Cape College, offering
training on a Wealth Management Qualification at National Qualification Framework (NQF) Level 5. This
project had 77 learners successfully completing their qualification and 25 of them went on to do a second
year in Advanced Diploma in Management (ADM) at the University of the Western Cape (UWC). Twenty-two
of these learners are Small, Medium and Micro-sized Enterprise (SMME) insurance brokers operating their
businesses in George.
This current project plan is rightly positioned to align with the INSETA strategy regarding supporting our SMMEs.
Due to the obvious absence of large insurance companies in the townships and rural areas, SMMEs are a
vehicle through which employment can be created for learners on completion of learnerships and internship
programmes.
6.1.2
Impact of actors from other Setas bearing on Inseta strategic objectives
The CEOs’ forums have bearing on the future cluster meetings because the participants in our financial sector
cluster want to have the endorsement of the CEO’s who fall within our cluster for the pursuance of shared new
or existing projects and scarce and critical skills. It was agreed by all present that the Skills Planning Managers
th
will meet with their respective CEOs before the 17 April 2014, in order to establish whether they are willing to
have joint CEO meeting to discuss the cooperative efforts of our SSP Financial Services Cluster (Report by
Ernest Kaplan on Financial Services Sector Skills Plan Cluster Meeting held at Mict Seta Gallagher House
Gallagher Estate Convention Centre Richards Drive Midrand, on the 11th March 2014 – Tuesday).
It is imperative to show the Department of Higher Education and Training what the benefits of shared
cooperative activity are. This includes concluding Memoranda of Understanding between ourselves with respect
to shared projects and common scarce and critical skills. It was agreed that the Chief Executive Officers of our
financial services cluster should meet shortly in order to accelerate the undertaking of cooperative efforts for our
financial services cluster. It was suggested that the CEO’s of our cluster should meet once a year.
Some projects where members of the Seta cluster may make joint inputs include the BankSeta work-integrated
learning project and the Inseta FETI HETI project.
There was debate around scarce and critical skills and what constitutes common scarce and critical skills. These
include ICT skills and different categories of accountants. Broad areas of shared skills are IT, Bank, CA
qualification, accounting and auditing (11th March 2014). here is a willingness on the part of members of financial
services cluster by concluding a firm proposal or memorandum of understanding. The need for this is expressed
in the White Paper on education p.68, where there is a section formalizing the need for collaboration between
members of a particular Seta cluster. What is envisaged for members of our financial services cluster is a joint
project on information technology (IT), where there is a shared interest and a joint contribution to the budget.
The target score achieved by each individual Seta would be presented separately as a contribution to this joint
project (Minutes of Inseta Financial Services Sector Cluster Meeting held on the 24th March 2014 – Monday
compiled by Ernest Kaplan) Also the sharing of offices by a Seta cluster at the offices of a TVET college. Also
jointly cooperating on cross-cutting programmes.
The Seta cluster could participate in a joint project on
information technology (IT), where there is a shared interest and a joint contribution to the budget. The target
score achieved by each individual Seta would be presented separately as a contribution to this joint project.
Meeting of the CEOs from our cluster has not taken place yet and concerted efforts must be put in place for this
to be effected.
Report-back on BankSeta CEO Mr Max Makhubalo visit to India in relation to ICT skills The reason for
this initiative was that there was a skills gap in relation to software engineering. He said that there
were possibilities for BankSeta, the Wholesale & Retail Seta, MICT, Fasset and Inseta working
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together on this project, because the stakeholders from the financial services cluster could not exist
without a satisfactory IT system. The emphasis of this visit was on the backend of IT systems (Minutes
of Sector Skills Plan Financial Services Sector Cluster Meeting held at Fasset on the 5th June, 2014,
compiled by Ernest Kaplan)
6.1.3 Strategic Partnerships within the Insurance Sector
Strategic partnerships are formed within different areas and include:
x
the short-term insurance subsector has set up a Human Capital committee, which has a mandate to
drive the skills agenda of this sector;
x
the INSETA also attends the ASISA Employment Equity and Education committee meetings where
the INSETA is given the opportunity to collaborate with ASISA sector representatives;
x
the INSETA also allocated a further R 5.9-million to fund a Wealth Management Level 5 Learnership
delivered by five FET colleges in the Western Cape;
x
the INSETA partnered with FET colleges and universities and provided bursaries in areas of scarce
and critical skills ranging from BCom Financial Planning to National Certificate Vocational (Financial
Management).
The allocation amount for these latter bursaries is R 14.2-million (Insurance Sector Education and Training
Authority, 2012).
6.2
Impact of the INSETA Sector Skills Plan on the Direction of the Strategic
Plan 2013-2016
The INSETA SSP projects actions and reflects the five priority strategic-outcome oriented goals which form
an inherent part of the INSETA’s strategic plan, viz:
x
Strategic Outcome Oriented Goal 1 – A credible institutional mechanism for skills planning in the
sector.
x
x
Strategic Outcome Oriented Goal 2 – Increased access to occupationally directed programmes.
Strategic Outcome Oriented Goal 3 – Encouraging better use of workplace-based skills
development.
x
Strategic Outcome Oriented Goal 4 – Encouraging and supporting co-operatives, small enterprises,
worker-initiated, non-governmental organisation (NGO) and community training initiatives.
x
Strategic Outcome Oriented Goal 5 – Building career and vocational guidance.
All of the above strategic outcome oriented goals emanate from the National Skills Development Strategy III
(NSDS III).
6.3
Operationally
Achieved
Credible
Institutional
Mechanism:
Skills
Planning in the Insurance Sector
Scarce and critical skills are identified through a statistical analysis of the relevant variables from the
Workplace Skills Plan (WSP) or Annual Training Report (ATR). They are also identified from information
obtained from levy-paying companies as well as from one-on-one interviews with the INSETA insurance
stakeholders.
x
How does the SSP lend practical import to Strategic Goal 2, viz. increased access to occupationally
directed programmes? This has been realised through various vehicles competency on
learnerships, internships and work-based experience programmes. Substantial funding has been
allocated to learnerships. Also, a number of achievements have been realised with respect to
learnerships. Two direct measures of increased access to occupationally directed programmes in
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relation to learnerships are the number of learners who completed the learnerships, and the number
of learners who are placed on completion of a learnership. The same measures apply to internships.
Other avenues, where consistent moves have been made to attain the realisation of the above goal,
are the funding of unemployed and employed BCom students in specific career directions, viz.
BCom insurance and financial planning, BCom finance and business management and Information
Technology (IT) qualifications. Other flagship projects that reinforce this goal contain various
attributes, viz. Wealth Management Level 5, together with an ADM (individual choice); SMME
learnership –NQF qualification – Financial Advisory and Intermediary Services (FAIS) compliance;
and funding of actuarial students at second, third and fourth year levels.
x
How does the SSP impart vital substance to Strategic Goal 3, viz. encouraging better use of
workplace-based skills development? This has been affected through the Business and Systems
Analyst (BASA) and internship project under the direction of the project office. The Department of
Economic Development and Tourism (DEDT) Western Cape Provincial Government in collaboration
with the industry initiated it in 2010.. The pursuit of this project is undertaken because business and
system analysis skills are found to be in short supply in the Year 13 Quality Council for Trade and
Occupations (QCTO) pilot underwriting project. As companies need to also be registered under the
QCTO as learning delivery sites, running the pilot at the urban regions where employers already
have previous experience of hosting learners on learnerships, the pilot has a better chance of
success and supporting co-operatives, small enterprises, work-initiated, NGO and community
training initiatives. It provides findings on the INSETA National Skills Broker Network, which provides
a forum for skills development discussion among small- and micro-insurance brokers within the
insurance sector. The INSETA employment opportunities portat, which forms an accessory to the
above broker network, have further complimented growing jobs for brokers through more successful
brokerages. The SSP research in the near future will undertake research to determine the
effectiveness of both the skills broker network and the employment portal. Another project that the
SSP has identified as contributing to the above strategic goal is the Small and Medium Enterprises
(SME) training voucher project, where the focus is on the provision of skills and training towards full
qualifications for fit and proper compliance. Forthcoming research by the INSETA researchers will
undertake a monitoring and evaluation exercise of the effectiveness and value-add benefits of this
project.
x
How does the SSP contribute to the advancement of the burial society movement, and in turn,
Strategic Goal 4? The research from the plan did a comparative analysis of the two Burial Society
Scheduled Reports. By comparing October 2012 with April to May 2013, where movement towards
the following target variables is measured: number of burial societies allocated; support of burial
society member/s to register as co-operatives; registration of burial societies as co-operatives; and
final training of burial societies as co-operatives. The skills division research team also identifies
new legislation that significantly impacts on Strategic Goal 4; of major import is the Financial
Services Board Notice 43 of 2013, where burial societies and Stokvels are exempted from Section 7
(1) of the Financial Advisory and Intermediary Services Act (Act No. 37 of 2002). The SSP also
identifies the geographical area/provincial location where the burial societies are located and by
studying this distribution, a strategic decision can be made about the geographical areas in which
burial society presence needs to be increased.
x
How does the SSP add value to Strategic Goal 5, viz. building career and vocational guidance? It is
imperative that this plan measure the value of a multifaceted approach to career and vocational
guidance channels through an empirical analysis of the various elements: viz. career guides; career
and vocational forums organised by the South African Qualifications Authority (SAQA); a variety of
exhibition days; career publications and Sci-Bono week. It also needs to make an objective
evaluation of the Career Guidance Calendar for 2012/2013, and make recommendations about the
need for additional items to be added. In addition, this plan needs to consolidate the statistics and
trends from Goal 4.8. Career paths are mapped to qualifications in all sectors and subsectors and
communicated effectively, contributing to improved relevance of training and greater mobility and
progression and making representations about shortcomings and limitations with respect to the
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following variables: number of institutions; province; municipality; area; urban/rural; gender; youth
and citizen status. Building career and vocational guidance efforts are also being accelerated
through various regional cluster agreements and MoU agreements with FET colleges on a regional
basis. This has also further advanced the start of a process to incorporate sector-specific
qualifications, initially in partnership with sector in-house training providers into the FET college
curricula. The associated risks associated with collaborating with FET colleges for the advancement
of career guidance need to be identified and mitigating controls need to be implemented. Mention of
these needs to be made in the Strategic Plan. The form of analysis of the SSP is determined by the
third (NSDS III) transformational imperatives, viz. race, class, gender, geography, age, disability and
the HIV/AIDS pandemic, where the results of these analyses shape the strategic direction of the
strategic plan 2013-2016. The types of statistical analyses that are undertaken are in line with the
above transformational elements, viz. profile of the sector reflected by occupational category broken
down by race; employee spread over the nine provinces; occupational category breakdown by age;
and gender breakdown within the insurance sector.
x
The SSP must identify the pertinent elements of the legislative framework, which must be
incorporated into the Strategic Plan 2013-2016. These range from the Skills Development Act (Act
No. 97 of 1998) (as amended) to the National Qualifications Framework Act, 2009 (Act No. 67 of
2008). The same plan also advises the salient aspects of other legislation that must form part of the
action plan for the Strategic Plan, for example under the Presidential Infrastructural Plan. Some of
the Presidential Infrastructure Co-ordinating Commission (PICC) Terms of Reference have value for
the INSETA’s projects: to identify the five-year priorities; develop a 20-year project pipeline; develop
objectives for skills, localisation, empowerment, research and development; and address capacity
constraints and improve co-ordination and integration. The Strategic Integrated Project (SIP), which
has possible relevance for the INSETA, is SIP 14, which covers the following: infrastructure
development for higher education, focusing on lecture rooms, student accommodation, libraries and
laboratories, as well as Information and Communication Technology (ICT) connectivity. Some
aspects of this SIP could be incorporated into the professional, vocational, technical, and academic
learning (PIVOTAL) grants aspects of the Strategic Plan.
(INSETA, 2013)
6.4
Strategic Goal 1: A Credible Institutional Mechanism for Skills Planning
(NSDS III 4.1) Performance Indicators and Targets
The INSETA will also collaborate with insurance and related-services subsectors to focus on implementable
interventions that address sustainability issues facing the sector. These interventions will address issues
such as transformation, human capital development, risk management and the professionalisation of trustees
and the sector as a whole.
Table 6-1: Establishing of a credible institutional mechanism for skills planning in the insurance and relatedservices sector
Goal 1: Establishing of a Credible Institutional Mechanism for Skills Planning in the Insurance & Related-Services
Sector
Outcomes
SSP
Decrease in skills gap
Contribution to the national establishment of a credible institutional mechanism
Objectives
1.1 Research
1.2 Determine
1.3 Identify
1.4 Identify
1.5
sector profile
supply &
priority scarce &
implantable
Disseminate
demand of
critical skills for
interventions
research
skills in the
the sector
that will
findings to
address the
stakeholders
sector
skills
shortages
Page 164
Baseline
Provisionally
Provisionally
Provisionally
Provisionally
approved SSP
approved SSP
approved SSP
approved
No baseline
Subsectors:
Employment
Skills gap:
Employment
Publications:
market share,
profile:
future skills
rate:
distribution of
potential
replacement
requirements &
reduction in
SSP
growth of
demand, &
skills linked to
shortages &
market &
over & under
growth
increase in
economic
supply
SSP
Indicators
qualified
indicators
Interventions
individuals
Analyse
Interpret
Validate
Review past
Hold research
market trends,
workplace
information
successful
seminars,
interview
skills plan &
gathered from
interventions,
publish
subsector
PIVOTAL, plan
WSPs through
review market
research
specialists or
data,
stakeholder
offerings &
reports in
analysts,
conduct focus
focus group
review past
industry &
review sector
group
discussions
projects that
other
economic data
discussions
resulted in
publications
&
with
reduction of
review industry
stakeholders,
skills
growth
&
shortages
projections
conduct labour
market
research in the
sector
6.4.1 Resource Consideration:
The expenditure of establishing a credible institutional mechanism for skills planning in the sector will be no
more than 10% of the annual discretionary grant allocation. Key staff considerations will be a combination of
both internal and external resources. Effective and efficient resource planning will be considered for the goal
interventions.
6.5
Strategic
Goal
2:
Increased
Access to
Occupationally
directed
Programmes
This goal is aimed at increasing the intermediate and higher level professional qualifications (such as
business and systems analysts, chartered accountants, actuaries, underwriters and risk managers) within the
sector, and assisting new entrants (entry level), and those that require work experience to qualify into the
sector. The impact of this will be youth with sought after and specialised qualifications.
In order to achieve this goal, four strategic objectives have been identified.
Table 6-2: Increased access to occupationally directed programmes
Goal 2: Increased Access to Occupationally Directed Programmes
Outcomes
Qualified new entrants into the labour market
Work integrated learning
Competent qualified lecturers
Curriculum workplace alignment
Page 165
Objectives
2.1 Support youth to
2.2 Assist youth
2.3 Foster
2.4 Improve access
obtain scarce &
with workplace
partnerships
to post-school
critical qualifications
practical experience
between education
learning sites,
& skills
& training
including work
institutions.
places
(FETUOT
Employers) to
provide for
workplace training
Baseline
Approximately 200
An average of 800
5 FET college
youth have been
youth per annum
contracts have been
No baseline
supported at tertiary
over the last 5 years
entered into
Completion of
Completion of
Learner
Numbers of
qualification
qualification
development,
graduates assisted
alignment of
to gain work
curricular with
experience &
workplace
number of learners
requirements &
with qualifications
level
Indicators
lecturer
development
Interventions
Develop: Black
Place: new entrants
Partner with FET
Provide bridging
actuaries,
into learnership and
colleges to deliver
programmes to
business & systems
internship
qualifications
facilitate learners
analysts, &
programmes,& FET
Identify
into the workplace,
interventions that
college students in
opportunities for
pay work
address priority
work places
collaboration &
experience grants to
curriculum
learners,
alignment to
link FET colleges &
workplace
universities of
requirements,
technology with
develop lecturers
workplaces &
through structured
provide articulation
programmes &
opportunities
skills in the sector
build capacity for
delivery of new
occupational
qualifications
Page 166
Strategic Outcome Oriented Goal 2: Increased Access to Occupationally Directed Programmes
Strategic Objective 2.1
Support youth to obtain scarce & critical skills through occupationally related
qualifications
Assist youth with practical workplace experience & skills
Foster partnerships between public education & training institutions (FETUOT
employers) to provide workplace training
Improve access to post-school learning sites, including work places
The INSETA supports youth to gain scarce and critical skills qualifications in the form of PIVOTAL
2
programmes to enhance the employability, employment and growth of the sector. In order to reinforce race
and gender transformation across the sector in line with the NSDS III, the INSETA assists Black and female
learners in particular.
The INSETA supports learning towards qualifications pertinent to the insurance sector’s scarce and critical
skills namely:
x
Black actuaries
x
Business and systems analysts
x
Principal officers and trustees
x
Claims assessors
x
Underwriters
x
Co-operative managers
x
Financial advisors
In order to reach youth and to offer relevant qualifications, partnerships will be forged with FET colleges,
training providers and universities. The INSETA supports building the capacity of FET colleges to deliver
qualifications that are aligned to workplace requirements. By way of example, in 2012 the UWC, in
collaboration with the College of Cape Town, South Cape College, Northlink College, and False Bay College,
delivered the Wealth Management Level 5 learnership that articulates with the UWC ADM. A further three
provinces shall commence in 2013. This builds the sustainability and relevance of the FET colleges, as well
as provides a relevant and occupationally directed qualification and workplace learning for learners.
6.5.1 Articulation of the wealth management career pathway
INSETA continues to support the Articulation Initiative launched in 2010 by providing funding for learnership
candidates to register with Technical Vocational Education and Training (TVET) colleges to complete their
National Qualification Framework (NQF) level 5 Wealth Management Qualification. Once they have
Formatted: Font: 6 pt, Bold
Page 167
2
PIVOTAL programmes that result in qualifications or part qualifications on the NQF – Government Gazette, 3 December No 35940.
Page 167
completed this qualification, learnership candidates will be able to advance to university, and they will be
provided with a bursary from INSETA (Insider, June 2014).
6.5.2 Partnerships with universities TVET colleges to provide bursaries in scarce
and critical skills
Large numbers of college graduates are seeking work experience opportunities to increase their
employability. INSETA had budgeted over R 90 million to place unemployed youths, including graduates into
the workplace in learnerships, internships and work experience programmes (Under the spotlight at the
recent stakeholder forums, (Mabika, The INSETA Insider, June 2014).
INSETA partnered with public universities and TVET colleges to support unemployed learners studying
towards full qualifications in areas of scarce and critical skills in the insurance sector. A total of 712
unemployed learners received bursary funding and 83% successfully completed their studies.
The ETQA will be supporting the colleges to implement INSETA programmes and capacitating lecturers
in this regard. INSETA is appointed as a lead SETA for two E Cape colleges (Ikhala and Ingwe) and one
in Gauteng (Ekurhuleni West) .
6.5.3 Key Developmental and Transformation imperatives
In order to access discretionary grants the programme applied for must promote the key Developmental and
Transformation Imperatives of the NSDS. In line with regulations and NSDS III transformational imperatives
the following evaluation criteria will apply to all applications:
Equity profile: the beneficiaries eligible for funding will be 85% Black, 54% Women and 4% people with
disabilities
Class: consideration will be given to youth from poor and marginalised communities
Geography: INSETA will encourage national recruitment, including recruitment from rural areas HIV/AIDS:
all learning programmes funded by INSETA must include a component of HIV/AIDS education, not
necessarily credit bearing (INSETA, June 2014).
In addition, the INSETA supports the placement of new entrants in learnerships, internships, and workplace
learning.
As such, the INSETA supports the progression of learners from gaining access to workplace learning, to
acquiring part and full qualifications, to being placed in the sector as well as building the capacity of public
providers for sustainable provision of such scarce and critical skills. The learning supported also spans both
entry-level and high-level qualifications.
6.5.4 Resource Considerations
The expenditure of the increased access to occupationally directed programmes will be targeted at 35% of
the annual discretionary grant allocation. Key staff considerations will be to use current resources, as well as
contractors and providers with specialist skills.
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6.6
Strategic Goal 3: Encouraging Better Use of Workplace-Based Skills
Development
By collaborating with employers, programmes for employed workers that will address the scarce and critical
skills required of the workforce to adapt to changes in the labour market can be sourced, identified, and
developed. This goal aims to address the need for scarce and critical skills as identified in the SSP and
through other research. Impact will be measured by reporting on decreases in critical skill shortages over the
next five years. In order to achieve this goal, two strategic objectives have been identified.
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Table 6-3: Encouraging better use of workplace-based skills development
Goal 3: Encouraging Better Use of Workplace-Based Skills Development
Outcomes
Better skilled employees
Decrease in scarce & critical skills
Objectives
3.1 Provide quality programmes that
3.2 Increase workplace learning
address scarce & critical skills for
development of employed people
Baseline
5% of the current sector employees
979 employers participating in the
are beneficiaries of the INSETA
mandatory grant scheme
funded programmes
Indicators
Completion rate of programmes,
Number of employers participating
number of beneficiaries on
in the mandatory grant scheme
programmes &
number of employees obtaining
qualifications
Interventions
Support quality programmes that
Promote workplace skills planning &
result in reduction of skills shortages
implementation,
&
reward employers through the
provide bursaries in qualifications
mandatory grant mechanism,
that are deemed scarce & critical
promote education, training and
practitioner development within
firms,
facilitate quality partners in the
development of occupational
qualifications meeting priority skills
needs towards QCTO registration, &
provide capacity building of quality
partners for delivery of
occupationally directed
qualifications under QCTO
Strategic Outcome Oriented Goal 3: Encouraging Better Use of Workplace-Based Skills Development
Provision of quality programmes that address scarce & critical skills for development
of employed people
Strategic Objective 3.2.
Increasing workplace learning
Shortages of scarce and critical skills in the workplace impede businesses to grow and adapt to their
markets.
On-going development of employed people is important to maintain the high levels of professionalism
required of the sector, as well as the competitiveness of the sector globally.
6.6.1 Resource Considerations
The expenditure for encouraging better use of workplace-based skills development will be targeted at 20% of
the annual discretionary grant allocation. Key staff considerations will be a combination of both internal and
external resources. Effective and efficient resource planning will be considered for each scarce and critical
skills project.
6.7
Strategic
Goal
Enterprises,
4:
Encouraging
Worker-Initiated,
and
Supporting
Non-Governmental
Co-operatives,
and
Community
Training Initiatives
By collaborating with relevant subsector associations and government funding agencies, this goal aims to
develop and support SMEs (including co-operatives, NGOs and CBOs). This will result in improved business
acumen over the next five years. The impact will be a subsector that is more professional and better skilled
Page 170
for sustainability, regulatory compliance, and consumer benefit. In order to achieve this goal, two strategic
objectives have been identified.
Table 6-4: Encouraging and supporting co-operatives, small enterprises, worker initiated NGOs and community
training initiatives
Goal 4: Encouraging & Supporting Cooperatives, Small Enterprises, Worker-Initiated, NGO & Community Training
Initiatives
Outcomes
SMMEs that show growth and are sustainable
Improved SMME sector profile
Objectives
Baseline
4.1 Support SMME (including NGO
4.2 Database of national brokers &
& CBO) through skills initiatives
intermediaries
2 663 small levy-paying firms and
No baseline
570 BEE firms are supported over
the past five years.
Indicators
Number of firms supported
Number of brokers on database
& beneficiaries trained
Interventions
Develop interventions that address
Create an advocacy campaign to
critical areas needed for
promote network,
sustainability & growth of SMMEs,
record details of brokers &
link interventions to potential growth
intermediaries on National Broker
areas within the sector,
Network &
facilitate development through
Maintain National Broker Network
SMME training voucher schemes,
database
support SMMEs in meeting the
compliance requirements of the
various legislations &
provide assistance through
employment creation programmes
Strategic Outcome Oriented Goal 4 Encouraging & Supporting Co-operatives, Small Enterprises, Worker-Initiated,
NGO & Community Training Initiatives
Support SME as well as burial societies (including NGOs,CBOs and cooperatives) through skills initiatives
Develop database of national brokers and intermediaries
Potential employment growth will happen through SME and through burial societies and co-operatives.
The development of national database of brokers and intermediaries will facilitate better communication with
brokers and intermediaries, in order to best understand and meet their development requirements. In
addition, consumers will be better informed and serviced and better able to meet their needs in an affordable
manner.
By way of example, one such project would be the INSETA in partnership with South African Federation of
Burial Societies Co-operative Limited (SAFOBS) and Burial Society of South Africa (BUSOSA) providing
capacity for the burial society boards and members in regulation and financial literacy. The low-income
consumers or members would be better informed and skilled to make financial decisions, and the cooperatives to be more sustainable. The INSETA is also able to support a greater reach of provinces and to
provide sustainable solutions to this community.
In addition, the INSETA supports the Black Brokers Network to grow opportunities for small and micro-sized
organisations and to meet the broader transformation imperatives of the sector.
6.7.1 Resource Consideration
The expenditure of the strategic goal encouraging and supporting co-operatives, small enterprises, workerinitiated, NGO, and community training initiates will be targeted at 30% of the annual discretionary grant
Page 171
allocation. Key staff considerations will be a combination of both internal and external resources. Effective
and efficient resource planning will be considered for each SME project.
6.8
Strategic Goal 5: Building Career and Vocational Guidance
Career guides will accurately reflect the career progression and learning pathway opportunities of the
insurance and related-services sector over the next five years. The INSETA will partner with schools, FET
colleges, universities and SAQA in the rollout of career guides. The impact will be relevant, informed career
guidance to youth accessing these channels in the nine provinces and growing a potential pool of talent to
access the sector. In order to achieve this goal, three strategic objectives have been identified.
Table 6-5: Building career and vocational guidance
Goal 5: Building Career & Vocational Guidance
Outcome
Career guidance & development information available in all 9 provinces
Objectives
5.1 Develop a career
5.2 Provide career
5.3 Forge partnerships
guide
guidance & development
with public institutions
information to youth both
and SETAs
within the sector &
prospective entrants to
the sector
Baseline
No baseline
Career guides have been
No baseline
distributed to eight of the
nine provinces
Indicators
Career paths are
Number of rural areas
Number of public
mapped to qualifications
targeted & career guides
institutions and SETAs
distributed
partnered with, &
industry partnerships
Interventions
Review existing sector
Distribute the guide to
Share offices with other
career guides &
schools nationally,
SETAs in the FET
supplement with
participate in career
colleges for the purpose
additional research,
exhibitions,
of providing career
Design & develop the
communicate through
development advice,
career guide, &
media channels &
collaborate with the
print the career guide
partner with industry
sector in promoting the
bodies to promote
insurance sector as a
careers in the insurance
sector of choice for
sector
employment &
partner with SAQA
career guide programme
Strategic Outcome Oriented Goal 5: Building Career & Vocational Guidance
Develop a career guide
Provide career guidance & development to youth both within the sector & prospective new
entrants to the sector for the next 5 years
Forge partnerships with FET colleges & industry bodies to disseminate career guidance
information
Positioning the insurance sector as a sector of choice will grow the pool of potential Black and women talent
for the sector and allow opportunities to access the sector to youth. This objective also provides the
opportunity for the INSETA to reach provinces within which the insurance sector is underrepresented,
through building partnerships across the provinces.
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6.8.1 Resource Consideration
The expenditure of the strategic goal building career and vocational guidance will be targeted at 5% of the
annual discretionary grant allocation. Key staff considerations will be to use current resources, as well as
contracting providers with specialist skills.
INSETA also aims to increase the number of qualified graduates (e.g. business and systems analysts,
chartered accountants, actuaries and underwriters) within the sector, and to assist new entrants (entry level)
and those that require work experience to qualify into the sector. The impact of this will be youth with soughtafter and specialised qualifications. The INSETA would further like to attract more school leavers to consider
careers in the insurance sector, especially where there is under-representation and scarce but critical skills.
INSETA plans to address the outcomes of the SSP in Programme 2, by:
x
Providing career guidance and development information pertaining to the sector, for the youth within
the sector, and including prospective entrants to the sector for the next five years. A key focus area
will be to continue disseminating career guidance and development information to all nine provinces,
including remote and rural areas; and
x
Assisting employed and unemployed youth with workplace practical experience and skills over the
next five years. The youth will be assisted in all nine provinces, as well as in remote and rural areas;
and partnering with the DHET and FET institutions on initiatives such as educating the youth in
mathematics.
6.9
Strategic Goal 6: Organisation Effectiveness
This goal will address operational processes within the INSETA in order to optimise performance and
increase efficiencies and effectiveness. The impact of this will be seamless processes and procedures which
will allow for operational effectiveness In order to achieve this goal, four strategic objectives have been
identified.
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Table 6-6: Strategic objectives to achieve Strategic Goal 6
Goal 6: Organisational Effectiveness
Outcome
Improved operational performance
Objectives
6.1 Maintain
6.2 Develop &
6.3 Establish an
6.4 Improve spend
effective corporate
implement a
effective SCM unit
rate on
governance
quality
discretionary funds
management
system
Baseline
Unqualified audits
No quality
No significant audit
Below 70% spend
management
findings
rate on projects
system &
inconsistent review
practice
Indicators
Audit findings,
Mapped policies &
Compliance
Increased project
annual board
processes, &
audit findings,
spend rate &
assessment &
standardised
speed of delivery
number of
attendance at
documentation
&
beneficiaries
board meetings
internal client
satisfaction
surveys
Interventions
Conduct annual
Establish a quality
Develop the
Develop
board
management
knowledge &
discretionary grant
assessments,
working group,
competency of the
policy
promote board &
review all the
SCM unit through
& guidelines &
senior
policies &
training, &
criteria for
management
processes &
review
accessing
development, &
updating, &
effectiveness of
programmes &
review & improve
ensure IT systems
the unit through
grants
internal controls
enhancements &
internal customer
integration
satisfaction
surveys & audits
(internal &
external)
Strategic Outcome Oriented Goal 6: Organisational Effectiveness
Maintain effective corporate governance
Develop & implement a quality management system
Establish an effective SCM Unit
Utilise financial resources optimally to implement the strategic plan
6.9.1 Justification:
x
Maintain a positive, credible reputation in the market
x
Encourage continuous improvement
x
Supply Chain Management (SCM) effectiveness is central to the organisation’s delivery of products
and services
x
Improve financial management to increase spend rate on discretionary funds and achieve strategic
goals more effectively
The risk associated with this goal is staff retention, due to the current specialist model that the INSETA
adopts.
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6.9.2 Executive Office – Resource Considerations
The expenditure will be budgeted for within 10% of the administration budget.
Human Resources. The human resource structure enables the INSETA to achieve its
strategic objectives as outlined in this strategy document. The period for filling vacant
positions is indicated, i.e. within three to six months of becoming vacant.
Financial Resources
The budget is based on the following assumptions:
x
Inflation scenarios on income: The budget is based on an 8% increase in income; this increase has
been calculated based on the average increase in levies over the last three years.
x
The budget is based on a mandate that must be performed. The mandatory grant is based on 50%
(to be reduced to 40% when grant regulations are promulgated and a 10% PIVOTAL grant will apply
as envisioned in NSDS III). The discretionary budget allocation is in terms of the six strategic goals
adopted and followed by the INSETA.
x
x
Staff development: The budget has made provision for a full staff complement.
Salary increases: The budget has made provision for structural adjustments. Performance bonuses
have been accommodated, and the investment and risk benefits introduced.
x
For expenditure forecasting, the INSETA used the submitted 2011/2012 budget as the basis and adjusted
for changes using new information that became available thereafter.
6.10
Recent and Forthcoming Projects: 2012-2015 Outline of INSETA
Project Plan
6.10.1 Impact studies to address skills needs
A monitoring and evaluation function is being undertaken on small, medium micro-enterprises who are
offering employment possibilities to learners who have completed learnerships and internships A
monitoring and evaluation function will also be carried out on the viability of offering funding to more
FET colleges other than the 3 who are currently being supported.
Human Capital research project on the short-term industry. The impact of professional standards,
transformation, and the need to fill scarce skills is being determined in this study and is discussed
below.
Broker Development Research This includes weighing up the impact of a shared service model versus
a business development support model. The impact of a best practice model will have to be
established. A significant component of this project is programme measurement and evaluation.
1.
Name of Organisation
Insurance Sectoral Training Authority (Inseta)
2.
3.
Title of research report
Research sub-sector
4.
Focus area of research
Seta-FET Collaboration Pilot Project
Please tick relevant option/s. More than 1 option
can be selected
AET Centres/Community Colleges
FET Colleges
X
Higher Education
X
Workplace Training (SETAs) (include other
and ask to specify)
can be selected
Access
Equity
Quality
X
Efficiency (eg drop-out, repetition, throughput)
X
Finance
NQF
X
Skills planning
X
Page 175
Reviews and evaluations
Work integrated learning/work based learning
Articulation and integration
X
Institutional governance and management
Career information
X
Other, please specify Promotion of SMME
development through the vehicle of SMMEs
offering employment possibilities to learners
who have completed learnerships and
internships. Also a phased-in approach towards
more public FET Colleges receiving funding
from Inseta other than the 3 FET Colleges which
are currently being supported. The efficacy of
this, will be measured through a monitoring and
a evaluation function (M&E).
5.
6.
7.
8.
Planned date of completion
of research
Name of researchers or
institution/s involved in the
research
Budget for research project
Source of funding for
research project
1.
2.
Name of Organisation
Title of research report
3.
Research sub-sector
4.
Focus area of research
31052015
Inseta, Ingwe FET College (Mount Frere); King
Sabatha Dalindyebo (Mthatha); King Hintsha
(Butterworth)
R1,305,000
Discretionary Grants
Inseta
Research Project - Human Capital Research
Project for the short-term insurance industry plus a
project contemplated for the long-term insurance
industry, as well.
can be selected
AET Centres/Community Colleges
FET Colleges
X
Higher Education
X
Workplace Training (SETAs) (include other
and ask to specify)
can be selected
Access
X
Equity
X
Quality
X
Efficiency (eg drop-out, repetition, throughput)
Finance
X
NQF
X
Skills planning
X
Reviews and evaluations
X
Work integrated learning/work based learning
X
Articulation and integration
X
Institutional governance and management
X
Career information
X
Other, please specify
Develop a Profile of the Short-Term Insurance Sector from the
Perspectives of:
¾ Professional Standards – Achieved through
Qualifications or Continuous Professional Development
or Both?; Succession Planning A Variable for
Consideration
¾ The Impact of Transformation in the Short-Term
Insurance Industry. An Analysis of Occupational
Category/Types of Work by Race; Acceleration of
Movement from Personal to Commercial Lines by
Persons of Colour
Scarce and Critical Skills identified through various Labour Market
Methods – The Use of various Standardized Occupational
Frameworks and Adjustments to them; the Application of
Recruitment Search Engines to identify Scarce and Critical Skills;
Addressing the Question of What constitutes the Difference
between Scarce and Critical Skills?
Also Black Broker Development and Trustees Development
Program included – one end objective of this project is to develop
black-owned brokerages.
Page 176
5.
6.
7.
8.
Planned date of completion
of research
Name of researchers or
institution/s involved in the
research
Budget for research project
Source of funding for
research project
Not yet known possibly 2015
Service Provider to be appointed through
collaboration between Inseta and the South African
Insurance Association (SAIA), the Insurance
Institute of South Africa (IISA), Financial
Intermediaries Association (FIA), and the South
African Underwriting Managers Association
(SAUMA)
2,539.644.35
Discretionary grants
6.10.2 Skills Programmes for Workers 2014
The project is defined as a pivotal project. The target is provide 3000 skills programmes to employed workers
within the insurance sector in order to alleviate scarce and critical skills shortages.
This project has its objective the overcoming of weaknesses or deficiencies in employees critical skills makeups by participating in skills programmes. A question that is dealt with in this section is the following: “What is
a skills programme?” A central element of such a programme is that it is occupationally- based and on
completion will comprise two or more credits towards a qualification registered on the National Qualifications
Framework. Only training providers registered with an applicable Education, Training, and Quality Assurance
Authority (Skills Development Act No. 97 of 1998) will be allowed to facilitate such programmes. This project
makes provision for reimbursing employers who funded workers within their companies to up-skills and
complement their current qualifications during the 2013/2014 financial year.
80% of the monetary allocation to this project will be used to alleviate scarce and critical skills pivotal
programmes. The following pivotal programmes are eligible for reimbursement to employers. These are the
following:
x
Management and leadership
x
Claims assessing
x
Underwriting
x
Actuaries
x
Business and systems analysis and development
x
Advice and sales
x
Other (including but not limited to training outside public practice, compliance officers, and
accountants.
The start date for this project is 01/11/2013 and the end date is the 30/06/2014
The NSDSIII indicator applicable project is 4.5 – Better use of workplace-based skills development. There are
three key objectives for the above project 1. With the decline in skills levies employers are finding it difficult to
sponsor their employees for compliance and some employees are being dismissed for non-compliance. This
supports the rationale for undertaking such a project in order to help employees receive their remaining
credits in order to obtain their full qualifications. 2. The downside to this project not being executed is that
there will be extra financial burden to employers because mandatory grants have been reduced by 30%. 3. A
third objective is to ensure that workers remain in employment and the presentation of an opportunity for
employees to meet the FAIS compliance requirements. (Skills Programmes for Workers, Project Motivation,
Singh, 23 October 2013).
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6.10.3 Skills Programmes for small businesses and cooperatives (burial societies)
nationally
This is also regarded as a pivotal type project. The aim of this project is to sponsor 1800 skills programmes to
employed workers within the insurance sector in order to lessen scarce and critical skills shortages. In
essence the purpose of this project is identical to the skills programmes for workers with the following
differences: it supports INSETA strategy and 2013/2014 Annual Performance Plan to fund 1000 small
businesses and 500 co-operatives (burial societies) workers to obtain skills programmes (Project motivation
for skills programmes for small businesses and cooperatives – burial societies, Singh, 2013).
The start date for this project is the 1/11/2013 and the end date is the 30/06/2014.
The scarce and critical pivotal programmes that are being funded are the same as those described under
paragraph 3, in section 6.10.1 skills programme above.
The NSDSIII indicator applicable to this project is 4.6, training and support provided to sector cooperatives,
small enterprises, and NGO’s. All the objectives for this project are the same as those indicated in the fifth
paragraph under section 6.10.1 above, Skills programmes for workers.
One of the critical impacts for this project is that it will create the opportunity for small burial societies to work
independently of the bigger funeral insurers. A further opportunity which presents itself, is that through these
skill program interventions, they will be able to develop business skills to support their business (Skills
programmes for Small Businesses & Cooperatives, Project Motivation, Singh 2third October, 2013)
6.10.4 Skills programmes for unemployed youth
The strategic outcome oriented goal for this project has a number of different focal points:
x
increase intermediate and higher level professional qualifications in the sector
x
matching the scarce and critical skills needs
x
new entrants and those already within the sector assist with the development of unemployed youth
x
transform the sector (Skills programmes for unemployed youth, Project Motivation, Singh 2013).
This project will be used to sponsor unemployed youth through the mechanism of skills programmes by
providing these youth with basic business skills in order to bridge the gap between the learner and the
workplace.
One objective of this project is to target learners within the FET colleges. The scarce and critical skills being
addressed for this project are identical to those discussed in paragraph 3, in section 6.10.1, on p.148-149,
above.
The applicable NSDSIII indicator for this project is 4.2, is increased access to occupationally directed
programmes.
The target set for this project is the funding of 2500 skills programmes for youth, who are unemployed.
The start date for this project is the 1st January 2014 and the end date is the 30th May 2015.
This project will assist with alleviating the gap between the learning institution and the workplace. Potential
employers are concerned about the fact that learners completing their studies at further education and
training colleges and universities lack basic business skills. The end goal is to ensure that youth coming from
various learning institutions are work ready and able to function in a business environment.
Page 178
What is the solution to this impasse? Firstly, it is to fund the provision of credit bearing and non-credit
programmes to give disadvantage youth the opportunity to study further. It is contended that non-credit
bearing programmes should not be excluded, as such programmes can be beneficial both for promoting the
personal growth of learners as well as for adding value to business- in- general.
On attaining competence on two or more of these skills programmes the curricula vitae of these unemployed
youth can be uploaded onto the employment portal of the national skills development broker network to which
all members of this broker network will have access (www.INSETAnetwork.co.za). (Skills Programmes for
Unemployed Youth, Project Motivation Singh, 6 February 2014)
6.10.5 Human Capital Research Project for the Short-Term Insurance Industry
This project has the following deliverables:
x
x
Conduct research into the short-term insurance industry
The research must provide a profile of the above sub-sector in terms of professional standards,
transformation achievements, and scarce and critical skills needs. Other aspects include highlighting
areas that offer job creation opportunities in the short-term insurance industry across all levels, any
industry expectations, including interventions, to address the identified gaps,
Page 179
The table below represents the breakdown of the sample for the short-term insurance industry project and the
various types of various research methodologies that will be applied.
Industry Sector
In
depth
face-to-face
Telephonic structured
interviews
Web-based
questionnaire
estimated returns
questionnaire
1.
Short-term
insurance
industry
Industry players
INSETA
6
accredited
30
70
5
trainers
Levy paying
100
Reinsurers short-term
6
Intermediary brokers short-
5
30
term
Industry Sector
In
depth
face-to-face
Telephonic structured
interviews
Web-based
questionnaire
estimated returns
questionnaire
auxiliary
200
Non levy-paying auxiliary
200
Levy-paying
activities
activities
Risk-transfer short-term
4
The table below represents the anticipated regional and organizational samples to be used for the research.
Regional Demographics
%
Organizational Demographics
Gauteng
50
Large (150+)
50
Western Cape
20
Medium (50-149)
25
Kwazulu-Natal
20
Small (1-49)
25
Eastern Cape
5
Free State
5
Limpopo
5
Mpumalanga
5
North-West
5
Northern Cape
5
%
The commencement of the short-term project is the 30th March 2014 and its conclusion is on the 31st July
2014.
6.10.6 Actuaries Development Project 2014
The aim of this project is to develop actuaries through the provision of funding to unemployed learners who
are registered and studying towards a qualification in actuarial science. The project is run jointly with the
South African Actuarial Sciences Program (SAADP). The SAADP through this programme seeks to alleviate
the shortage of actuarial skills among the Black community in South Africa. The INSETA sector skills plan
has identified the actuarial profession as a scarce skill. This project contributes to INSETAs’ targets by
funding high value qualifications through the provision of bursaries to the unemployed.
This project supports actuarial students at 3 universities which are located in the following provinces, viz.
University of the Witwatersrand – Gauteng; University of Pretoria – Gauteng; and the University of Cape
Town – Western Cape.
The NSDSIII indicator and sub-indicator for this project is the following: 4.2 increasing access to
occupationally-directly programmes and 4.2.3 high level national scarce skills are being met by work ready
graduates from higher educational institutions.
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The South African Actuarial Development Programme supplies aspiring black actuaries with bursaries and
hands-on learners’ academic support. This is the fifth year that INSETA is collaborating with the South
African Actuarial Development Programme. To date this project has yielded 109 actuarial science graduates
and 11 qualified actuaries. We have had a 100% employment rate of graduates from this project.
The commencement date of this project is the 1st August 2014, and its conclusion date is the 30th April 2015.
(Actuarial Development Project, 2014, Project Motivation, Snell 6 March 2014).
6.10.7 Learnerships 2014
This project involves the provision of learnership grants to 1098 unemployed new entrants into the insurance
sector; of these 88 will be people with disabilities, as well as 642 employed people in the insurance sector.
This project constitutes a pivotal programme.
The objectives of this project are manifold: to provide opportunities for workers to progress in their existing
careers; unemployed learners at entry level to qualify for access into the insurance sector; and review the
organizing framework for occupations and sector industry codes in order to standardize codes in the sector
and align qualifications to these codes.
The running and funding of learnerships for employed and unemployed people is a requirement of the
national skills development strategy and the national skills accord as an effort to reduce youth unemployment
and create increased access to occupationally directed programmes. The benefits of this will be youth with
sought-after and specialized qualifications.
The aim is to support employed and unemployed learners where the primary purpose is to implement
learnerships to address scarce and critical skills shortages from companies in provinces where INSETA has
received an expression of interest to host learners. The only province excluded is the North-West province.
Another component of this project is bursaries to address scarce and critical skills for pivotal programmes.
The following scarce and critical skills are covered: management and leadership; claims assessing;
underwriting; actuaries; business and systems analysts and development; advice & sales; and other
(including but not limited to training outside public compliance, compliance officers and accountants. 80%
monetary allocation for this purpose.
There are 2 NSDSIII indicators applicable to this project, viz. 4.2 increased access to occupationally directed
programmes and 4.5 better use of workplace based skills development.
The start date of this project is the 15 November 2013, and the end date is the 30th October 2015.
(Learnerships 2014, Project Motivation, Peele, 29 November 2013).
6.10.8 Internships 2014
This is a pivotal programme whose objective is offer internship funding to 1362 unemployed learners, which
will include 250 learners from further education and training colleges. The goal of this project is to cater for
unemployed graduates, further education, and training learners who are studying towards a FET qualification
to obtain work experience, as well as learners who obtained their qualifications through learnerships to obtain
entry into the insurance sector. The learners who are eligible for internships from FET colleges are those that
are studying towards Business Management and Finance courses who require a component of work
experience before they can receive their certificates.
Learners in all provinces are eligible to apply for these internships.
The running and funding of internships for unemployed youth is a prerequisite of the national skills
development strategy and the national skills accord in efforts to deal with youth unemployment and increase
access to occupationally directed programmes in the workplace. INSETA is committed to supporting 1850
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unemployed youth in internships, 850 of whom are currently in internship programmes. The priority is deal
with critical skills shortages in companies who have expressed an interest to host intern learners.
Applications will be welcomed from all provinces. The scarce and critical skills being catered for are identical
to those for learnerships (see section 6.10.6 above, fifth paragraph).
The NSDS III indicator applicable to this project is 4.2-increased access to occupationally directed
programmes.
This project aims to place 65% of learners on successful completion of these internships.
The start date for this project is the 1fifth November 2013 and the end date is the 30th October 2015.
(Internships 2014, Project Motivation Peele 23 October 2013)
6.10.9 Bursaries for workers in 2014
The aim of this project is to provide 1200 workers in the insurance industry with bursaries in order to address
scarce and critical skills. This project is defined as a pivotal programme. Bursaries are provided to levypaying INSETA stakeholders in the insurance sector in order for their employees to obtain a full qualification.
Between 2011 and 2012, the insurance sector has shown that training of employees within levy-paying
companies enjoys a high priority for them. In addition, our levy-paying stakeholders have reported that the
training of their staff has improved the productivity levels within their organization. Bursaries are one vehicle
available to support the insurance sector to achieve a skilled workforce.
The INSETA’s discretionary grant policy and guidelines requires that training funded by bursaries must be
carried out through public further education and training colleges and higher education and training
institutions. Applicants who wish to undertake training with business schools attached to public further
education and training colleges may be considered for bursaries.
The bursary amount is capped at R 20,000 per applicant.
80% of these bursaries will be used to address scarce & critical skills pivotal programmes. (Please refer to
6.10.6 fifth paragraph for the list of these scarce & critical skills).
The NSDSIII indicator applicable to this project is 4.5, is better use of workplace-based skills development.
Another objective of this project is to address transformation in the sector (.Bursaries for Workers, 2014,
Project Motivation, Peele 2third October 2013).
6.10.10
Broker Development Programme
The purpose of this project is to implement a Business Development Support programme for small, medium,
and micro-enterprises. The need for black broker development has been highlighted as a scarce and critical
skills need as well as an issue of sustainability that is supported by the following professional association, viz.
Association of Savings and Investment of South Africa, South African Insurance Association, Financial
Intermediaries Association and the Black Brokers Forum.
The project consists of two sub-projects.
1. Business Development Support (BDS), a 24 month broker pilot development programme that will support
the growth and development of small to medium brokerages within the insurance sector, focusing on
developing entrepreneurship and business acumen where the critical success outcome is to improve the net
profitability and sustainability of black brokerages within the insurance industry.
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2. Broker Development Research – a research programme that will run parallel with, and use the support
study as a case study to,
Weigh up a shared service model versus a Business Development Support model, including classroombased education options, as the optimal model for future Broker Development interventions. The research
component will include engagement with key industry stakeholders, regulatory and professional bodies to
achieve a best practice model for optimal, scalable, and sustainable approaches to broker development.
High-level activities for this project will include
x
Up-front identification and selection of brokers
x
Up-front diagnosis of the current state of the brokerages’ business condition
x
Customized growth strategy and business plan
x
Hands-on business development and specialist support (including marketing, products development,
accounting and legal) throughout the duration of the project
x
On-going performance monitoring and reporting
x
Targeted mentoring and skills development as needed in line with unique needs
x
Programme Measurement and Evaluation
Other needs, once identified through research, will be addressed through INSETA’s funding of pivotal
programmes.
The commencement date of this project is the 1st February 2014, and the conclusion date is the 31st March
2016. (Broker Development Programme, Project Motivation, Mthombeni, 3rd February 2014)
6.10.11
Bursaries for youth not in employment
As directed by INSETA’s strategy and annual performance plan, INSETA has a strategic objective to support
youth to gain qualifications in scarce and critical skills that are funded through the mechanism of bursaries.
INSETA aims to support 300 youth who are currently not in employment but who show great academic
potential to obtain qualifications required in the insurance and related services sector. Bursaries are paid
directly to the further education and training colleges and higher educational institutions for qualifications that
are relevant to the insurance sector. Learners from rural areas in all provinces will receive funding
preference.
The following qualifications will be funded: B.com (finance, risk, finance, and investments), financial planning,
actuarial science, FET College NCV in financial management, IT, Business Management, Sales & Marketing.
(Bursaries for youth not in employment, Project Motivation, Snell, 3 April 2014).
The month start date is April 2014 and the month end date is March 2016.
6.10.12
Quality Learning Capacitation Project
The focus of this project is on capacitating training providers within the new Quality Council for Trade &
Occupations (QCTO) quality assurance framework in order to improve the quality of their learning delivery,
increase access for all learners together with ensuring the subsequent quality and output of intermediate level
skills for placement in the industry, under the “Insurance School” concept.
A special focus of this project is to encourage the participation of public further education and training
colleges by capacitating them in the delivery of quality learning in this subsector, thereby also meeting
INSETA’s mandate to cooperate with public institutions on skills development initiatives and implement these
initiatives in the outlying regions. There is also a need to update the capacity and quality of training delivery in
line with the Quality Council for Trade and Occupations as well as the requirement for developing skills on
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how to design learning material and assessment tools within the new framework in order to support training
providers to develop and deliver quality material.
The applicable NSDSIII indicators are 4.2 increasing access to occupationally directed programmes and 4.3
promoting the growth of the further education and training college system that is responsive to sector, local,
regional, and national skills needs and priorities.
The start date of this project is the 1st January 2013, and the end date is the 31 December 2014. ( Quality
Learning Capacitation Project, Project Motivation, Traut 19 February 2013).
6.10.13
The SME Training Vouchers Project
This Strategic outcome oriented goal, through partnerships with relevant Government funding agencies, aims
to support and enable skills initiatives for Sector Small Enterprises (both levy and non-levy paying),
Cooperatives, Non-profit Government Organisations and Community Based Organisations that will improve
business acumen over the next five years (SME Training Vouchers Project, Project Motivation, Singh ,13
th
April 2012).
The majority of stakeholders within the insurance sector are currently small, micro non- levy-paying
employers, and the current challenges are that there is no access to funding or projects for non-levy paying
Small, Micro Enterprises (SMEs) from INSETA. Non-Levy paying employers as well as small levy payers
require the support of INSETA in “Compliance related training and training on full Qualifications for license
retention”. The Training Vouchers project will cater for the training needs of registered non - levy paying
employers within the insurance sector as well as small levy paying employers. The idea of such a project
emanates from research, interviews, and focus groups conducted over the last two years with many SME
companies. These SMEs do not have ample training budget and therefore find it difficult to send
management and staff members on training that is necessary for them to grow in their jobs and for the
business to prosper. In line with the vision of NSDS lll which states: “Building a skilled and capable workforce
and that shares in, and contributes to, the benefits and opportunities of economic expansion to support an
inclusive growth path”, this project aims to up skill the current workforce, to ensure a sustainable business for
the future of the insurance sector and the economy, thereby allowing opportunities for employment into this
growing sector.
The start date of this project is the 1st April 2012 and the end date is the 31st March 2015.
The following NSDSIII goal applies 4.6 Encouraging and supporting cooperatives, small enterprises, worker
initiated, NGO and community training initiatives
6.11
How does INSETA achieve the priorities of relevant pieces of legislation
with respect to transformation?
Black economic empowerment legislation and the Financial Sector Charter drive the transformation of the
sector and increase the demand for skilled black employees in all occupational categories, especially the
professional and managerial category. Previous research conducted by INSETA shows that there has been
progress with transformation of the insurance industry. Transformation efforts in medium and large
enterprises in the categories Sales Workers and Admin Workers are paying off. For Sales Workers, Africans
constitute 65.3%, Coloureds 8.7%, Indians 5.8%, and Whites 20.1%. For clerical and admin
Page 184
Workers, Africans comprise 40.8%, Coloureds 23.7%, Indians 10.6% and Whites 24.8%. While these ratios
are closer to reflecting SA’s demographics, improvement remains a challenge. The converse is true for small
enterprises. In the category. Sales Workers, Africans comprise 21%, Coloureds 8.4%, Indians 7.2% and
Whites 63.2%. Blacks make up an even smaller percentage of total employment in small enterprises – this
means that we have far too few black entrepreneurs in the industry. Whites constitute 63.8% compared with
36.2% for blacks. The poor status of transformation in small enterprises means that much effort and
substantial resources are needed to promote and support black small businesses, with a focus on both skills
development and business support.
Black entrepreneurs complain that there remain structural barriers of entry into specialist areas of the
profession. It is therefore important that these be identified through research.
INSETA has commissioned Len Deacon and its Associates to conduct research on its behalf. The research is
expected to provide information on the insurance industry to identify the state of transformation in the various
subcategories of the insurance industry (The INSETA Insider, April 2014. Also, refer to section 6.10.4 –
Human Capital Research Project for the short-term insurance industry).
6.12
An Overview with respect to Partnerships with Public Further Education
& Training Colleges as discussed in Chapters 5 & 6
One of the many ways in which this is achieved is through the funding of learners in order to give them
access to further education and training courses. We are therefore promoting public further education and
training colleges as institutions of choice for learners who are being funded by INSETA.
We also promote relationships between the further education and training colleges that are associated with
our employers and us so that we can assist with the provision of work-integrated learning.
Over a number of years we have run a collaborative project known as the FETI HETI project with the
University of the Western Cape and 5 FET colleges in this region which allows qualifying learners to obtain a
level 5 qualifications in wealth management and then proceed onto an advanced management diploma
should they so desire. Our relationship with these FET Colleges is further strengthened by the fact that the
assessors who assess the above qualifications are INSETA registered assessors. The relationship with the
above Colleges and UWC is further reinforced by the fact that they are delivering INSETA and SAQA
accredited qualifications.
Our partnerships with various further education and training colleges drive one of our key programmes, viz.
youth, education and development. These partnerships also assist with meeting specific goals of the national
skills development strategy III, viz. strategic goal 2, strategic goal 3 accesses to occupationally directed
programmes; better use of work-placed based skills development; strategic goal 4 encouraging and
supporting cooperatives, small enterprises, and non-governmental organizations and strategic goal 5,
building career & vocational guidance. In relation to career guidance we partner with FET Colleges in relation
to the distribution of career guides.
We cooperate with further education and training education and training colleges in order to strengthen our
internship initiative. Our internship 2014 project is used for this purpose. We achieve this, with the assistance
of our employers/stakeholders who provide the required work-based experience to learners at FET colleges
before qualifying. We also fund learners at FET colleges through the National Student Finance Aid Scheme
(NSFAS). Bursaries for youth not in employment provide bursaries to TVET colleges for learners who are
studying at these institutions. One full qualification which special import is the FET college, NCV in financial
management.
INSETA together with other seta clusters has concluded a number of memoranda of understanding with FET
Colleges in the Western Cape, Kwazulu-Natal, Mpumalanga and the Eastern Cape. The foci of these MoUs
Page 185
range from curriculum and qualification design to assisting FET students with access to work placements.
There has been an accelerated drive towards incorporating sector specific insurance qualifications into the
public FET college curriculum. INSETA has also funded unemployed learners studying toward s full
qualifications at TVET colleges. Highly favourable pass rates are achieved. One of our projects skills
programmes for unemployed youth targets learners at TVET colleges. One objective of this project is to make
learners form these colleges able to function adequately in the world of work.
6.13
Pivotal Programmes linked to the National Qualifications Framework
A number of our programmes are considered to be pivotal, viz.
x
skills programmes for workers 2014;
x
skills programmes for small businesses and cooperatives (burial societies) nationally;
x
actuaries development project; learnerships 2014;
x
internships 2014; bursaries for workers 2014;
x
bursaries for youth not in employment; and
x
the Pivotal programmes are generally linked to scarce & critical skills in the insurance industry and
range from management and leadership to advice and sales.
Pivotal programmes are used to support employees to comply with FAIS requirements.
Skills
programmes meet the requirements for pivotal programmes because they are registered on the National
Qualifications Framework. All the pivotal programmes support the applicable NSDSIII indicators, e.g.skills
programmes for workers 2014, supports the NSDSIII indicator 4.5- better use of workplace based skills
development. INSETA applies pivotal funding to address key skills needs in our sector.
6.14
Concluding Remarks
INSETA has a variety of projects some of which commenced in 2012 and extend until 2015, others, which
started in 2013, and run into 2014, and finally those which commenced in 2014. There are currently 3
ongoing skills programmes: skills programmes for workers; skills programmes for small businesses and
cooperatives (burial societies), and skills programmes for unemployed youth. The greater portion of these
programmes is linked to a predefined scarce and critical skills list. All these programmes can be considered
pivotal grant programmes. A definition of what constitutes a skills programme applies to all these
programmes. The range of scarce & critical skills extends from management and leadership to compliance
officers. Even though each of these skills programmes has a common focus, each of them has their own
applicable NSDSIII indicator. With respect to skills programmes for workers employers can be retrospectively
reimbursed for training undertaken and paid for by the employers. In contrast to skills programmes for
workers, skills programmes for small businesses and cooperatives, and skills programmes for unemployed,
youth have a different focus in the sense that the former is geared towards skills programmes already
undertaken. The latter two programmes are geared towards skills programmes still to take place and
therefore the initial step for these two programmes is on registration for the learners. In all cases the skills
programme will only be paid for, if the employer can produce a certificate of competence or statement of
results for the learner. It can be seen that different numeric targets have been set for each of these skills
programmes. Targets for funding small businesses and cooperatives have also been set. This skills
programme is intended to assist t unemployed youth to gain access to the insurance sector. A key focus of
this programme is that the aim is to draw learners from the further education and training colleges. Learners
who complete two or more credits on this programme can be loaded onto the employment portal of the
national skills broker network.
The Human Capital Research Project for the short-term insurance industry has a number of different vantage
points ranging from compiling a profile of this industry to the filling of the skills gaps. Various types of
research methodologies will be applied. Various segments of this sector will make up the role players for this
Page 186
study. All nine provinces will be represented in this study. Organizational demographics refer to what
percentage of large, medium, and small companies will be included in the sample.
The actuaries development project for 2014, This is a funding project aimed at developing black learners who
are studying towards a qualification in actuarial science. This project is a joint venture between INSETA and
the South African Actuarial Development Program and includes the involvement of three South African
universities. The employment rate of graduates from this program is especially commendable.
In relation to learnerships for 2014, this project is made up of unemployed learners from whom the disabled
group is drawn, as well as employed learners. Learnerships serve as mechanisms of career progression as
well as providing access opportunities for access into the insurance sector. Another objective of this project is
to refine the organizing framework for occupational codes and make it more specific to the insurance
industry. Learnerships are a requirement of the national skills development strategy and the national skills
accord. Another mechanism that learnerships are used for, is to provide a solution for scarce and critical
skills. Bursaries are sometimes used as an accessory component of learnerships in order to address scarce
and critical skills.
Internships for 2014 are geared towards unemployed learners of which a specified number of them are drawn
from further education and training colleges. These learnerships are considered pivotal programmes. The
eligibility criteria for learners from further education and training colleges are defined in terms of subject
choices. Efforts are made to place a good percentage of learners on completion of their internships.
Bursaries for workers in 2014 – this is a pivotal project used to address scarce skills shortages. A numeric
target has been set for this project. The eligibility criteria of employers in order to secure bursaries for their
employees are very explicit. Those employers who receive bursaries on behalf of their employees must
ensure that public educational institutions rather than private ones, preferably carry out the training given.
The greater portion of bursaries allocated goes to learners within companies who are pursuing full
qualifications that will alleviate scarce and critical skills shortages.
Broker development program is intended to support small, medium, micro-enterprise development and
especially the promotion of Black broker development and their sustainability into the future.
The project consists of 2 subprojects business development support and broker development research.
Business development support focuses on developing entrepreneurship and business acumen while broker
development research will weigh up the pros and cons of a shared service model versus a Business
Development research model. The end project is a best practice model for sustainable approaches to broker
development. A number of high-level activities have been identified for this project extending from
identification and selection of brokers to programme measurement and evaluation.
Bursaries for youth not in employment - the point of departure is that it is imperative for INSETA to fundi
youth who are unemployed in order to assist them to gain qualifications in scarce and critical skills. This
strategy is inherent in INSETA strategic plan and annual performance plan. Numeric targets for this project
have been set. Bursaries range from B.com finance to sales and marketing.
The Quality Learning Capacitation Project – the primary objective of this project is to capacitate training
providers under the quality council for trade and occupations quality assurance framework as well as to
improve the intermediate skills of learners under the insurance school concept. It is vital also to cooperate
with further education and training colleges and capacitate them in the design of learning material and
assessment tools in line with QCTO developments.
The SME Training Vouchers project – the aim of this project is to support small, medium micro-enterprises
where INSETA funds jointly with government agencies in order to improve the business ability of these
enterprises. INSETA will fund both levy and non-levy paying stakeholders. The major focus of this project is
on compliance related training and training on full qualifications for licence retention. Especially, non-levy
Page 187
paying stakeholders are excluded from participation in projects and this project presents them with an
opportunity to participate in these projects.
6.15
Conclusions
This chapter illustrates how the implementation plan is created and acted upon with the assistance of various
mechanisms, viz. MoU reflecting partnerships with particular reference to FET colleges and NSDS III
strategic-oriented goals
The above plan takes its tangible form through forthcoming and current INSETA projects.
It confirms that the SSP propels the five NSDS III strategic-oriented goals that form a primary part of the
INSETA’s strategic plan.
All strategic-oriented goals are defined and given practical import by their outcomes, multiple strategic
objectives (in some instances), baseline, indicators, and interventions.
Page 188
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Mabika, T. 2012. BI Tool for Goal 4.8 Career Paths for the 4 Quarters of 2012. Supplied by: Corporate
Services Marketing: INSETA.
Mabika, T. 2013. Career Guidance Calendar for 2012-2013. Supplied by: Corporate Services Marketing:
INSETA.
McGill,
J.
2013.
A
New
alternative
to
a
South
African
Matric.
[Online]:
Available
from:
www.sagoodnews.co.za/education/alternative_to_academic_matric_to_open_doors_for_sas_youth.html
Presidential Infrastructure Co-ordinating Commission. 2012. Presidential Infrastructure Plan. [Online]
Available from: http://www.info.gov.za/speeches/docs/2012/
PricewaterhouseCoopers (PWC). 2010a. Strategic and Emerging Issues in South African Insurance.
Johannesburg: PWC.
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PWC.
PricewaterhouseCoopers (PWC). 2012a. Emerging Trends and Strategic Issues in South African Insurance.
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PricewaterhouseCoopers (PWC). 2012b. Fortune Favours the Brave Insurance Industry Analysis: South
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Rapson,
M.
2013.
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Insurance:
Vast
Potential.
[Online]
Available
from:
http://www.ey.com/ZA/en/Industries/Financial-Services/Insurance
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RNCOS.
2011.
South
African
Insurance
Industry
Forecast
to
2013.
[Online]
Available
from:
http://www.rncos.com/Report/IM206.htm
Schultze. 2006. Not known: Not known.
Sci-Bono. 2012. Sci-Bono Feedback Report: Finance Week hosted by Sci-Bono, 16-20 April 2012. Not
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SETA Project Management System (SMS). n.d. 310.4900.029000 – Internships for people with intellectual
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Skills programmes for Small Businesses & Cooperatives, Project Motivation, Singh 2third October, 2013
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Skills Programmes for Workers, Project Motivation, Singh, 2third October 2013
th
SME Training Vouchers Project, Project Motivation, Singh ,13 April 2012
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South Africa. 2011. KwaZulu-Natal SETA Forum Agreement. Not known: Not known.
South Africa. 2011. Mpumalanga SETA Forum Agreement. Not known: Not known.
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South Africa. Department of Basic Education. 2011. Education for all 2009 Country Report: South Africa.
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South Africa. Department of Education and Training. 2012. Not known: Not known.
South Africa. Department of Environmental Affairs. 2010. Environmental Sector Skills Plan for South Africa.
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South Africa. Department of Higher Education and Training. 2011. Organising Framework for Occupation.
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www.worldlifeexpectancy.com
Page 193
ANNEXURE B: DEMAND FOR SKILLS 2014 – 2017
Demand for Skills 2014
Skills Type
OFO
2014
Code
Percentage
of
2014
Total
611201
144
14.27%
541102
108
10.70%
222103
67
6.64%
224101
63
6.24%
131102
60
5.95%
261101
45
4.46%
261302
42
4.16%
552305
38
3.77%
222301
32
3.17%
552304
32
3.17%
111101
29
2.87%
599602
26
2.58%
541101
22
2.18%
252401
21
2.08%
111201
19
1.88%
132101
19
1.88%
221101
16
1.59%
149202
14
1.39%
131103
12
1.19%
135102
12
1.19%
271302
11
1.09%
224402
9
0.89%
221204
8
0.79%
599601
8
0.79%
Training & Development Professional (skill level 5)
223301
7
0.69%
251501
7
0.69%
224203
6
0.59%
599603
6
0.59%
225103
5
0.50%
251503
5
0.50%
139910
4
0.40%
221205
4
0.40%
HR advisor (skill level 5)
223101
4
0.40%
224401
4
0.40%
254301
4
0.40%
262101
4
0.40%
313102
4
0.40%
111407
3
0.30%
132201
3
0.30%
132501
3
0.30%
132602
3
0.30%
139908
3
0.30%
222102
3
0.30%
253101
3
0.30%
261102
3
0.30%
263201
3
0.30%
263202
3
0.30%
Page 194
Skills Type
OFO
2014
Code
Percentage
of
2014
Total
Programme or project administrators (skill level 3)
511102
3
0.30%
639301
3
0.30%
Personnel/HR manager (skill level 5)
132301
2
0.20%
133504
2
0.20%
Supply & Distribution manager (skill l;evel 5)
133601
2
0.20%
222302
2
0.20%
232404
2
0.20%
252301
2
0.20%
254201
2
0.20%
261301
2
0.20%
261303
2
0.20%
262103
2
0.20%
511201
2
0.20%
541401
2
0.20%
552302
2
0.20%
599901
2
0.20%
131101
1
0.10%
132401
1
0.10%
133201
1
0.10%
135101
1
0.10%
Call or Contact Centre Manager (Skill Level 5)
149201
1
0.10%
221102
1
0.10%
221103
1
0.10%
221203
1
0.10%
224103
1
0.10%
224703
1
0.10%
224704
1
0.10%
225301
1
0.10%
233401
1
0.10%
254401
1
0.10%
254408
1
0.10%
262102
1
0.10%
263203
1
0.10%
271101
1
0.10%
272403
1
0.10%
272902
1
0.10%
532103
1
0.10%
551301
1
0.10%
552110
1
0.10%
552201
1
0.10%
132306
0
0.00%
139906
0
0.00%
212401
0
0.00%
222204
0
0.00%
222205
0
0.00%
224701
0
0.00%
232403
0
0.00%
249101
0
0.00%
251502
0
0.00%
251901
0
0.00%
271301
0
0.00%
271403
0
0.00%
531101
0
0.00%
Page 195
Skills Type
OFO
2014
Code
Percentage
of
2014
Total
561907
0
0.00%
591103
0
0.00%
611302
0
0.00%
Grand total
1
009
Page 196
Skills Type
OFO
2015
Code
Percentage
of
2015
Total
541102
204
21.27%
611201
117
12.20%
222103
78
8.13%
224101
63
6.57%
131102
63
6.57%
599602
35
3.65%
552305
31
3.23%
541101
30
3.13%
261302
27
2.82%
222301
27
2.82%
261101
23
2.40%
131103
21
2.19%
552304
20
2.09%
149202
19
1.98%
511102
12
1.25%
111101
11
1.15%
252401
10
1.04%
224203
10
1.04%
111201
9
0.94%
599601
9
0.94%
224402
8
0.83%
271302
7
0.73%
221205
7
0.73%
132101
6
0.63%
221101
5
0.52%
313102
5
0.52%
263202
5
0.52%
135102
4
0.42%
599603
4
0.42%
251503
4
0.42%
254301
4
0.42%
253101
4
0.42%
639301
4
0.42%
261303
4
0.42%
221103
4
0.42%
221204
3
0.31%
223301
3
0.31%
225103
3
0.31%
254201
3
0.31%
254401
3
0.31%
224701
3
0.31%
249101
3
0.31%
251501
2
0.21%
224401
2
0.21%
132501
2
0.21%
132602
2
0.21%
261102
2
0.21%
263201
2
0.21%
232404
2
0.21%
552302
2
0.21%
Page 197
Skills Type
OFO
2015
Code
Percentage
of
2015
Total
Advocate or Barrister (Skill Level 5)
271101
2
0.21%
212401
2
0.21%
139910
1
0.10%
223101
1
0.10%
133504
1
0.10%
133601
1
0.10%
222302
1
0.10%
252301
1
0.10%
261301
1
0.10%
541401
1
0.10%
131101
1
0.10%
135101
1
0.10%
221102
1
0.10%
254408
1
0.10%
262102
1
0.10%
132306
1
0.10%
139906
1
0.10%
222204
1
0.10%
222205
1
0.10%
232403
1
0.10%
251502
1
0.10%
271301
1
0.10%
271403
1
0.10%
561907
1
0.10%
591103
1
0.10%
611302
1
0.10%
262101
0
0.00%
111407
0
0.00%
132201
0
0.00%
139908
0
0.00%
222102
0
0.00%
132301
0
0.00%
262103
0
0.00%
511201
0
0.00%
599901
0
0.00%
132401
0
0.00%
133201
0
0.00%
149201
0
0.00%
221203
0
0.00%
224103
0
0.00%
224703
0
0.00%
224704
0
0.00%
225301
0
0.00%
233401
0
0.00%
263203
0
0.00%
272403
0
0.00%
272902
0
0.00%
532103
0
0.00%
551301
0
0.00%
552110
0
0.00%
Credit or Loans Officer (Skill Level 2)
552201
0
0.00%
251901
0
0.00%
531101
0
0.00%
Page 198
Skills Type
OFO
2015
Code
Grand total
Percentage
of
2015
Total
959
Page 199
Skills Type
OFO
2016
Code
Percentage
of
2016
Total
541102
190
28.70%
131102
105
15.86%
222103
73
11.03%
611201
66
9.97%
224101
32
4.83%
599602
32
4.83%
222301
17
2.57%
552305
14
2.11%
111101
12
1.81%
552304
10
1.51%
599601
10
1.51%
261302
8
1.21%
221205
7
1.06%
132101
6
0.91%
261101
5
0.76%
252401
5
0.76%
221101
4
0.60%
271302
4
0.60%
599603
4
0.60%
251503
4
0.60%
254301
4
0.60%
313102
4
0.60%
111201
3
0.45%
224401
3
0.45%
261102
3
0.45%
263201
3
0.45%
232404
3
0.45%
224402
2
0.30%
221204
2
0.30%
251501
2
0.30%
253101
2
0.30%
511102
2
0.30%
222302
2
0.30%
252301
2
0.30%
254201
2
0.30%
552302
2
0.30%
254401
2
0.30%
271403
2
0.30%
139910
1
0.15%
132501
1
0.15%
263202
1
0.15%
133504
1
0.15%
133601
1
0.15%
261301
1
0.15%
541401
1
0.15%
225301
1
0.15%
531101
1
0.15%
541101
0
0.00%
149202
0
0.00%
131103
0
0.00%
Page 200
Skills Type
OFO
2016
Code
Percentage
of
2016
Total
135102
0
0.00%
223301
0
0.00%
224203
0
0.00%
225103
0
0.00%
223101
0
0.00%
262101
0
0.00%
111407
0
0.00%
132201
0
0.00%
132602
0
0.00%
139908
0
0.00%
222102
0
0.00%
639301
0
0.00%
132301
0
0.00%
261303
0
0.00%
262103
0
0.00%
511201
0
0.00%
599901
0
0.00%
131101
0
0.00%
132401
0
0.00%
133201
0
0.00%
135101
0
0.00%
Call or Contact Centre Manager (Skill Level 5)
149201
0
0.00%
221102
0
0.00%
221103
0
0.00%
221203
0
0.00%
224103
0
0.00%
224703
0
0.00%
224704
0
0.00%
233401
0
0.00%
254408
0
0.00%
262102
0
0.00%
263203
0
0.00%
Advocate or barrister (Skill Level 5)
271101
0
0.00%
272403
0
0.00%
272902
0
0.00%
532103
0
0.00%
551301
0
0.00%
552110
0
0.00%
552201
0
0.00%
132306
0
0.00%
139906
0
0.00%
212401
0
0.00%
222204
0
0.00%
222205
0
0.00%
224701
0
0.00%
232403
0
0.00%
249101
0
0.00%
251502
0
0.00%
251901
0
0.00%
271301
0
0.00%
561907
0
0.00%
591103
0
0.00%
611302
0
0.00%
Page 201
Skills Type
OFO
2016
Code
Grand total
Percentage
of
2016
Total
662
Page 202
Skills Type
OFO
2017
Code
Percentage
of
2017
Total
541102
190
33.75%
222103
71
12.61%
611201
64
11.37%
131102
53
9.41%
599602
26
4.62%
224101
24
4.26%
111101
17
3.02%
552305
12
2.13%
552304
10
1.78%
261302
7
1.24%
261101
5
0.89%
222301
5
0.89%
252401
5
0.89%
132101
5
0.89%
599603
5
0.89%
511102
5
0.89%
271302
4
0.71%
599601
4
0.71%
251503
4
0.71%
254301
4
0.71%
313102
4
0.71%
221101
3
0.53%
263201
3
0.53%
232404
3
0.53%
221204
2
0.36%
251501
2
0.36%
221205
2
0.36%
224401
2
0.36%
253101
2
0.36%
222302
2
0.36%
254201
2
0.36%
552302
2
0.36%
254401
2
0.36%
271403
2
0.36%
111201
1
0.18%
139910
1
0.18%
132501
1
0.18%
261102
1
0.18%
263202
1
0.18%
133504
1
0.18%
252301
1
0.18%
261301
1
0.18%
541401
1
0.18%
251901
1
0.18%
541101
0
0.00%
149202
0
0.00%
131103
0
0.00%
135102
0
0.00%
224402
0
0.00%
223301
0
0.00%
Page 203
Skills Type
OFO
2017
Code
Percentage
of
2017
Total
224203
0
0.00%
225103
0
0.00%
223101
0
0.00%
262101
0
0.00%
111407
0
0.00%
132201
0
0.00%
132602
0
0.00%
139908
0
0.00%
222102
0
0.00%
639301
0
0.00%
132301
0
0.00%
133601
0
0.00%
261303
0
0.00%
262103
0
0.00%
511201
0
0.00%
599901
0
0.00%
131101
0
0.00%
132401
0
0.00%
133201
0
0.00%
135101
0
0.00%
149201
0
0.00%
221102
0
0.00%
221103
0
0.00%
221203
0
0.00%
224103
0
0.00%
224703
0
0.00%
224704
0
0.00%
225301
0
0.00%
233401
0
0.00%
254408
0
0.00%
262102
0
0.00%
263203
0
0.00%
271101
0
0.00%
272403
0
0.00%
272902
0
0.00%
532103
0
0.00%
551301
0
0.00%
552110
0
0.00%
552201
0
0.00%
132306
0
0.00%
139906
0
0.00%
212401
0
0.00%
222204
0
0.00%
222205
0
0.00%
224701
0
0.00%
232403
0
0.00%
249101
0
0.00%
251502
0
0.00%
271301
0
0.00%
531101
0
0.00%
561907
0
0.00%
591103
0
0.00%
611302
0
0.00%
Page 204
Skills Type
OFO
2017
Code
Grand total
Percentage
of
2017
Total
563
Page 205
Need
identified by
the
Department of
Higher
Education &
Training
Qualified
youth need to
gain work
experience in
order to enter
the insurance
sector
Scarce skills
Business
needs and
imperatives
Sector Skills Plan
Project Motivation
Sector Skills Plan
Project Motivation
INSETA Board
Suggestions
Stakeholder focus
groups
Scarce skills
Project Motivation
Employer Forums
INSETA Board
Directives
Stakeholder
Forums
Scarce Skills
in the Sector
Sector Skillls
Plan
Method of Establishing need.
Research Method & Data Sources
Demand
Supply
Need
Established
Medium
Medium
Medium
Time Frame
of Need
Bursaries
Project
Internship
Project
Prioritised
Prioritised
Prioritised
Prioritised
(In Strategic
Plan)
Strategy
Identified to
Address
Specific Need
Learnership
Project
National
Bursaries
Finance Aid
Scheme of South
Africa
INSETA
Bursaries
Internships
Current SETA
Activity/
Planned SETA
activity
Learnerships
53 B.com
learners funded
at 1st and 2nd
year levels
Number of
learners who did
not get
placement 124
Number of
learners placed
on completion
Number of
learners who
completed the
learnership 640
Number of
learners placed
on completion
555
Number of
learners placed
85
Number of
learners who
completed the
internship
Measured
Impact of SETA
Activity
North-West
University
4.2.12
4.2.1.2
Page 206
4.2.1.2
Learner
Stipends
Intern Stipends
Alignment to
NSDS Goals
Identified
Delivery
partners
Youth
Development
Scarce & Critical
Skills
Youth
Youth
Development
Alignment to
NSDS priorities
R3 500 000.00
R14 021 920.
R33 899 400.00
Indicative
Budget
ANNEXURE C: THE RELATIONSHIP BETWEEN NEED ESTABLISHED, STRATEGIES IDENTIFIED AND
ALIGNMENT TO NATIONAL SKILLS DEVELOPMENT STRATEGY GOALS AND PRINCIPLES
Wealth
Management
Level 5
Scarce skills
in the sector
South Cape
College
False Bay
College
College of Cape
Town
All of them
compliant with
the Financial
Advisory &
Intermediary Act
Employer Need
Applicants in the
market place
Better utilization of
work-placed based
skills development
INSETA Board
directives
Boland College
University of the
Western Cape
25 of them
followed an
articulation route
to complete an
advanced
diploma in
management
77 out of a 100
learners
completed wealth
management at
level 5
successfully
Project Motivation
Funding of
further education
and training
colleges and
university of
western cape to
undertake wealth
management at
level 5
Scarce Skills
Prioritised
Sector Skills Plan
Employer Forums
Use of Further
Education &
Training College
and a university
as service
providers
University of
the
Witwatersrand
Ekhurlani
College
Gert Sibande
College
IT Qualifications
Medium
University of
Johannesburg
Business
Management
Applicants in the
market
Stellenbosch
University
Free State
Nelson Mandela
Metropolitan
University
Investment
Management
Determined once
final results have
been obtained
Employer Need
Financial
Planning
Bursaries for
employed &
unemployed
B.com students
Better application
of workplace
based skills
development
INSETA Board
suggestions
Prioritised
Project Motivation
Bursaries
Project
Scarce skills
Medium
Sector Skills Plan
Rhodes
University
Employer Forums
Pass rates
available in
February 2014
4.5.1.2
4.5.1.2
Page 207
Youth
Development of
Scarce & Critical
Skills
Scarce & Critical
Skills
Youth
Development
Scarce & Critical
Skills
R5 782 000.00
R6 750 000.00
Sector Skills Plan
Project Motivation
Sector Skills Plan
Project Motivation
Need to
develop
actuaries
identified by
INSETA and
the South
African
Actuarial
Development
Programme
Sector Skills Plan
Employer
INSETA Board
advice
able to write
regulatory
exams and
later articulate
with wealth
management
level 5
Cooperative
Forums
Project Motivation
NSDSIII goals increase access to
occupationally
directed
programmes
Potential entry
into the
insurance
sector if
successful
Need for
accessing
occupationally
directed
programmes
Sector Skills Plan
Stakeholder
forums
Provide
unemployed
learners with a
opportunity to
study
Medium
Medium
term
Medium to
Long-Term
Prioritized
Prioritised
Prioritised
Free Regulatory
Exam Training
Material
Collaboration
with the South
African Actuarial
Development
Programme
Learners to do
wealth
management
level 4 and
short-term
insurance level 4
Direct to
unemployed
learners who will
be hosted by
SMMEs on a
nation-wide
basis
Conducting of
preparatory
exams to
enhance the
chances of
learners passing
the Regulatory
exams
Supporting
unemployedd
learners who
have the
potential to
become
actuaries
Selected
learners
undertake the
identified
courses
59 learners
impact
determinded
February 2014
29 Seminars
51 out of 61
learners passed
83.6% pass rate
2012
55 out of 64
learners passed
85.9% pass rate
2011
60 organizations
are hosting these
learnerships in 5
provinces
Masifunde
SAADP Service
Provider 2013
4.6.1.1
4.2.3.2
4.2.3.1
4.2.1.2
Page 208
SMME
development
Scarce & Critical
Skills
Youth
Development
Scarce & Critical
Skills
Youth
Development
R6 613 901.10
R8 954 418.41
R22 165 000.00
Need for
institutional
skills planning
Increased
access to
occupationally
directed
programmes
To achieve
better
utilization of
workplace
based skills
developments
Scarce &
Critical Skills
Need for
employees of
non-levy
paying and
small levypaying
companies to
undergo
preparation in
order to pass
their
regulatory
exams
INSETA Board
recommendations
Industry forums
Project Motivation
Sector Skills Plan
Project Motivation
Sector Skills Plan
Project Motivation
Medium
Medium
Prioritized
Prioritized
Researching and
the production of
a SSP which
meets the needs
of the sector
Strategy
involves
developing
business system
analysts
Conducting of
advance
preparation for
regulatory
exams
Collaboration
with our
stakeholders and
research service
provider
Increasing
competitiveness
in the sector to
facilitate growth
& sustainability
A INSETA Board
approved sector
skills plan
Steady
improvement rate
of graduating
learners
4318 delegates
benefited
9 provinces
Fem Research
Consultants cc
The Cape
Information
Technology
Initiative (CITI)
PC Training
College
4.1.1.2
4.5.1.3
4.1.1.1
4.5.1.2
4.5.1.1
4.6.2.1
Page 209
Critical Skills
Research &
Benchmarking
Scarce & Critical
Skills
Youth
Development
Training &
Support provided
to sector
cooperatives
Research &
benchmarking
R300 000.00
(includes 5
scarce skills
projects)
R60 973 950
Provide
unemployed
youth with
business skills
Scarce & Critical
Skills from the
Sector Skills Plan
Need for this
research seen by
the short-term
professional
associations
Pivotal
programmes
for scarce &
critical skills
Human
Capital
research
project for the
short-term
industry
Employees from
the membership
databases of the
various
professional
associations to
be included in the
sample
Workers/Learners
from levy-paying
companies who
have undertaken
scarce & critical
skills studies
funded by their
companies
Scarce & Critical
Skills from 2013
Sector Skills Plan
Pivotal
programmes
for scarce &
critical skills
Prioritized
Selection of
suitable
unemployed
youth through a
selection
process who
would benefit
from a skills
programme
linked to scarce
& critical skills
Prioritized
Deliverables
have been
identified,
sample has been
selected and the
research is in
process
Must be
accredited with
the ETQA
division of
INSETA or
another Seta
Selecting
suitable
companies who
have applied to
get paid back on
courses that their
employees have
undertaken in
the area of
scarce and
critical skills
Prioritized
To address 3
critical skills
pillars
transformation,
qualifications &
scarce and
critical skills
Provide
unemployed
youth with
opportunities to
undertake skills
programmes and
thereby give
them a chance
for possible
entry into the
insurance sector
Medium
Medium
Companies
eligible to claim
back on skills
programmes for
scarce & critical
skills
Medium
Annual
Performance
Plan
Identified
training
providers who
can offer skills
programmes
linked to scarce
& critical skills
Annual
Performance
Plan
Skills division
research team
in collaboration
with training
providers
Must be
accredit3ed
N/A
Annual
Performance
Plan
4.1.1.3
4.1.1.2
Page 210
Youth
Development
4.2.1.1
Research &
Benchmarking
Scarce & Critical
Skills
SMME
development
4.5.1.2
4.2.1.2
Scarce & Critical
Skills
4.5.1.1
R195,111000
R15,000000
R15000000
Unemployed
learners with
certificates
diplomas and
degrees
Medium
Use NSDSIII
and National
Skills Accord
criteria to direct
internships
connected to
scarce skills
Use NSDSIII &
National Skills
Accord criteria to
direct
learnerships
linked to scarce
skills
Prioritized
Prioritized
Prioritized
FET Colleges
serve as a source
of supply for
these learners
Applying
learners can
apply from all
provinces
Internship
progress reports
Processing of
Tranche
payment
Learnership
progress reports
Processing of
Tranche
payments
Organizing the
logistics of the
project with the
South African
Actuarial
Development
Programme
Annual
Performance
Plan
Annual
Performance
Plan
Annual
Performance
Plan
Training
Providers
South African
Actuarial
Development
Programme
Universities of
Cape Town
Witwatersrand &
Pretoria
Employers
Training
Providers
Give unemployed
learners who have
secured insurance
qualifications the
opportunity to gain
work-based
experience as a
stepping stone to
secure permanent
employmen
Medium
To address
scarce skills
need
Pivotal
programmes
in the form of
internships to
address the
social problem
of
unemployment
Give unemployed
learners the
opportunity to gain
access into the
insurance sector
with a insurance
relevant & critical
qualification
2nd
component to
standardize
OFO codes for
the insurance
sector
Unemployed,
employed and
persons with
disabilities
Medium
Employers
Provide
opportunities for
employed learners
to increase the
number of their
insurance relevant
qualifications
Pivotal
programmes
in the form of
learnerships
Black learners
who are eligible
to pursue
actuarial science
qualifications
Need for
bursaries for
learnerships
Shortage of black
actuaries in the
insurance sector
Pivotal
programmes
for scarce
skills
4.2.1.2
4.2.1.1
4.2.1.2
Page 211
Scarce & Critical
Skills
Youth
Development
Scarce & Critical
Skills
Youth
Development
Youth
Development
4.2.3.2
4.2.1.1
Scarce & Critical
Skills
4.2.3.1
R5,797400
R55,618,000.00
R9,972.017.00
Scarce & critical
skils from the 2013
sector skills plan
Requirement for
training providers
and public further
education and
training colleges to
become familiar
with the QCTO
quality assurance
framework and
impart
intermediate skills
Need was
identified for
familiarizing
training
providers with
the new
QCTO
framework
Scarce & critical
skills from 2013
sector skills plan
Need for
bursaries
among
unemployed
youth
Need to fund
full
qualifications
for employees
within levypaying
companies
Pivotal
programmes
in the form of
bursaries
linked to
scarce &
critical skills
Facilitators and
lecturers at
private training
providers and
public further
education and
training colleges
respectively
unemployed
youth who have
good academic
potential and are
eligible to study
at further
education and
training colleges
and universities
Employees from
levy-paying
stakeholder
companies
Medium
Medium
Medium
Prioritized
Priortized
Prioritized
The advent of
the QCTO gave
rise to the need
to expose a new
general quality
assurance
framework to
training
providers and
further education
and training
colleges
Opening up of
bursary funding
window
Opening of
bursary funding
window
Place learners
after completion
of internship
A satisfactory
and well scoped
project which
meets the
deliverables
stated in the
preceding
columns
Rejection of
unsatisfactory
applications
Processing of
bursary
applications &
approvals
Responding to
applications
which have been
submitted
through the
bursary funding
window
Processing of
bursary
applications and
approval
rejection of
unsatisfactory
applications
Responding to
applications
which have been
submitted
through the
bursary funding
window
Annual
Performance
Plan
Annual
Performance
Plan
Annual
Performance
Plan
Training
providers who
can impart the
new QCTO
quality
assurance
framework and
who can
develop
assessment
tools and
learning
material as
required by the
QCTO mandate
Further
education and
training colleges
& higher
educational
institutions
Employers get
quotations from
training
providers
4.2.1.1
Page 212
Youth
Development
Scarce & Critical
Skills
Youth
Development
4.2.1.1
4.2.1.2
Youth
Development
Scarce & Critical
Skills
4.5.1.2
4.5.1.1
R6,674,500.00
R19,260000
R25,550000
Scarce & Critical
Skills
4.2.1.2
Priortized
Provision of
vouchers for
regulatory exam
training
Annual
Performance
Plan
Training of
providers who
can offer
regulatory exam
workshop
training
Page 213
Youth
Development
4.2.1.1
Medium
Employees from
small medium
micro-enterprises
Need for funding
for small medium
micro-enterprises
for training nonlevy paying
stakeholders
Compliance
Training for
Regulatory
Exams and
FAIS
professional
qualifications
Training
provider and
research partner
who can advise
on a best
practice model
for promoting
the growth and
sustainability of
Black brokers
Scarce & Critical
Skills
Annual
Performance
Plan
4.1.1.3
The
development of a
best practice
model to support
the development
of black brokers
Develop
customized
growth strategy
and business
plan
Selection of
learners from
employers who
are eligible to
undertake
regulatory exam
workshop
training
Weigh up pros
and cons of a
shared service
model as against
a business
development
model
SMME
development
Prioritized
4.1.1
Strategy and
model for
developing
entrepreneurship
and business
acumen to
ensure
sustainability of
Black
brokerages
Medium
Existing black
brokers provide a
responsive
project and
research sample
Demand for black
brokerages who
are sustainable
and profitable has
been determined
by market
research
Need to
develop black
brokers within
the small
medium
microenterprise
milieu has
become very
apparent
within the
South African
economy
Scarce & Critical
Skills
4.2.1.2
Need to
produce
learners with
intermediate
level skills in
the insurance
schools
environment
R22165000
R8,600000
A
2
Career Guidance Calendar 2012/2013, 157
Career Paths are mapped to Qualifications, 157
Challenges Experienced in the Last Project, 149
Changes in the Insurers’ Business Models, 80
Chapter 1, 28
C
Black Middle Class, 77
Broker Development Programme, 182
Building a resilient short-term Sustainability: industry in South Africa, 70
Bursaries for workers in 2014, 182
Bursaries for youth not in employment, 183
B
A Multifaceted Strategy to Address Career and Vocational Guidance Channels, 155
A New Alternative to a South African Matric, 94
ACKNOWLEDGEMENTS, 12
ACRONYMS AND ABBREVIATIONS, 9
Actuaries Development Project 2014, 180
An Analysis of the ranking of occupations between the years 2014-2015; 2015-2016, and 2017-2018., 127
An Overview with respect to Partnerships with Public Further Education & Training Colleges as discussed in
Chapters 5 & 6, 185
ANNEXURE B: DEMAND FOR SKILLS 2014 – 2017, 194
ANNEXURE C: THE RELATIONSHIP BETWEEN NEED ESTABLISHED, STRATEGIES IDENTIFIED AND
ALIGNMENT TO NATIONAL SKILLS DEVELOPMENT STRATEGY GOALS AND PRINCIPLES, 206
Anticipated Critical Skills Required for 2020, 132
Articulation of the wealth management career pathway, 167
2013 Internship and Learnership Programmes, 147
2013 Internship Programme, 147
2013 Learnership programme, 147
1.1 Introduction, 28
1
FOREWORD, 13
Funeral Insurance, 76
Page 214
F
Economic Outlook, Performance, and Drivers of Change, 62
Employee Provincial Spread, 44
Employment in South Africa, 64
Executive Office – Resource Considerations, 175
E
Demand for Skills 2014, 194
Demand for Skills According to PricewaterhouseCoopers and the INSETA, 104
Demand for Skills According to Recruitment Trends in the Insurance and Related-Services Sector, 108
Discretionary Grants, 30
Distribution of Employees by Gender and Disability, 49
Drivers of Change Towards 2020, 80
D
Chapter 2, 62
Chapter 3, 90
Chapter 4, 118
Chapter 5, 137
Chapter 6, 159
Claims, 81
Completion and Employment Statistics for 2012 Learnerships, 148
Completions and Employment Statistics for 2010 Internships, 150
Completions and Employment Statistics for 2011 Internships, 150
Concluding Remarks, 59, 88, 114, 136, 186
Conclusions, 158, 188
Critical Skills, 132
Critical Skills Emerging from the 2020 Landscape, 132
Customer Behaviour, 84
H
G
Key Developmental and Transformation imperatives, 168
Key Indicators on an Aggregated Basis Including International Financial Reporting Standards, 72
K
Judging the Business through the Lens of Pillar III Reporting, 73
Justification:, 174
J
Impact of actors from other Setas bearing on Inseta strategic objectives, 161
Impact of Structural Changes on Sector Skills Needs within the Insurance Sector, 62
Impact of the INSETA Sector Skills Plan on the Direction of the Strategic Plan 2013-2016, 162
Impact of the Last Project, 149
Impact studies to address skills needs, 175
Implementation Plan, 159
Increased Focus on the Consumer, 80
Increasing Regulation, 79
Industry Analysis, 107
INSETA’s Programme 3: Scarce and Critical Skills, 151
INSETA’s Programme 4: Small and Micro-Enterprise Development, 153
INSETAs funding collaboration with the National Student Financial Aid Scheme of South Africa., 151
Intermediaries Shake-up, 80
Internship Programmes, 147
Internship Project, 101, 149
Internships 2014, 181
Introduction, 62, 90, 118
Investment and Unit Trusts, 76
I
Health Care Benefits, 74
Highlights of the Last Project, 149
HIV/AIDS, 81
How does INSETA achieve the priorities of relevant pieces of legislation with respect to transformation?, 184
How is the Environmental Driver Relevant to the INSETA?, 80
Human Capital Research Project for the Short-Term Insurance Industry, 179
Global Insurance: Vast Potential, 63
M
L
Page 215
Partnerships with Burial Societies/Co-operatives Skills Support Project, 154
Partnerships with universities TVET colleges to provide bursaries in scarce and critical skills, 168
Pivotal Programmes linked to the National Qualifications Framework, 186
Planning Towards the Implementation of Scarce and Critical Skills in PIVOTAL Programmes, 134
Plans for Skilling the Insurance Sector under the New Quality Assurance Framework, 31
Presidential Infrastructure Plan, 88
Professionalisation of the Insurance and Related-Services Sector, 52
Project 1
P
Occupational Class by Age, 47
Operationally Achieved Credible Institutional Mechanism: Skills Planning in the Insurance Sector, 162
O
Need for Bursaries and PIVOTAL Programmes, 134
New Education Training and Quality Assurance Landscape, and Partnerships, 31
Non-Sector-Specific Drivers of Change, 81
N
Macro-Economic Outlook, 64
Mandatory Grants and the Skills Development Levies, 29
Market Segmentation, 68
Memoranda of Understanding Reflecting Partnerships, 159
Micro-Insurance, 84
More and New Entrants, 81
Motor Insurance, 87
Learnership Programmes, 147
Learnership Project, 148
Learnerships, 98
Learnerships 2014, 181
LIST OF FIGURES, 8
LIST OF REFERENCES, 189
LIST OF TABLES, 6
Longevity, 82
Long-Term Insurance, 71
R
Q
Scarce and Critical Skills, 118
Scarce and Critical Skills Reported in the Insurance Sector, 119
Sector Profile, 32
Sector skills plan objectives determine programmes in the Inseta strategic plan, 139
Sector-Specific Drivers of Change, 84
Short-Term Insurance, 69
Skill Shortages pointed out in the 2012 INSETA PESTEL Report, 107
Skills Levies and Grants, 28
Skills Programmes for small businesses and cooperatives (burial societies) nationally, 178
Skills programmes for unemployed youth, 178
Skills Programmes for Workers 2014, 177
Skills Supply and Demand in the Insurance and Related-Services Industry, 90
Social Media and Technology, 79
SSP objectives and Inseta’s indicative budget, 151
Strategic Development, 137
S
Racial Breakdown in the Sector, 46
Recent and Forthcoming Projects: 2012-2015 Outline of INSETA Project Plan, 175
Recommended Cross-Cutting Programmes: Critical Skills, 133
Regulation, 78, 80
Reinsurance and Alternate Risk Transfer, 77
Relevance of National Development Plans, Policy Documents and Government Priorities for INSETA’s Sector
Skills Plan, 137
Research and Innovation, 96
Resource Consideration, 171, 173
Resource Consideration:, 165
Resource considerations, 154
Resource Considerations, 152, 168, 170
Retirement Funds and Pension Funds, 75
Risk Management, 77
Quality Learning Capacitation Project, 183
Further Education and Training and Higher Education and Training Articulation Programme, 149
Project Plan Sector Education Training Authority/Public Further Education and Training Collaboration and
Establishing Sector Education Training Authority Offices in the Eastern Cape Public Further Education and
Training Colleges, 160
Page 216
TABLE OF CONTENTS, 2
The Clerical and Admin Workers Category, 130
The Demand for Skills, 103
The Following Memoranda of Understanding are concluded or are Still under Negotiation, 160
The INSETA and its Skills Plan for the Insurance Sector, 28
The INSETA and the KwaZulu-Natal Sector Education Training Authority Cluster and Nine KwaZulu-Natal
Further Education and Training Colleges, 160
The INSETA and the Mpumalanga Sector Education Training Authority Cluster and Three Norht West Further
Education and Training Colleges (Draft Agreement, 160
The INSETA and the North West Sector Education Training Authority Cluster and Three North West Further
Education and Training Colleges, 160
The INSETA and the Western Cape Sector Education Training Authority Cluster and Six Western Cape Further
Education and Training Colleges, 160
The Inseta Projects, 30
The INSETA Sector Skills Plan Development Process, 28
T
Strategic Goal 1: A Credible Institutional Mechanism for Skills Planning (NSDS III 4.1) Performance Indicators
and Targets, 144, 164
Strategic Goal 2: Access to Occupationally Directed Programmes (NSDS III 4.2) Performance Indicators and
Targets, 145
Strategic Goal 2: Increased Access to Occupationally directed Programmes, 165
Strategic Goal 3
Better Use of Workplace-Based Skills Development (NSDS III 4.5) Performance Indicators and Targets, 151
Strategic Goal 3: Encouraging Better Use of Workplace-Based Skills Development, 169
Strategic Goal 4: Encouraging and Supporting Co-operatives, Enterprises, Worker-Initiated, Non-Governmental
and Community Training Initiatives, 170
Strategic Goal 4: Training and Support Provided to Sector Co-operatives, Small Enterprises and NonGovernmental Organisations (NSDS III 4.6) Performance Indicators and Targets, 152
Strategic Goal 5: Building Career and Vocational Guidance, 172
Strategic Goal 5: Building Career and Vocational Guidance – Performance Indicators and Targets, 155
Strategic Goal 6: Organisation Effectiveness, 173
Strategic Goal 6: Organisational Effectiveness – Performance Indicators and Targets, 158
Strategic Partnerships within the Insurance Sector, 162
Strengths, Weaknesses, Opportunities, and Threats and Risk Analysis, 67
Subsectors of the Insurance and Related-Services Industry, 68
Summary of Scarce and Critical Skills Reported, 131
Supply and Demand Dynamics for Specific Occupational Fields, 108
Supply of Skills from Secondary Schools, and Further Education and Training Institutions, 92
Supply of Skills from Tertiary Institutions, 95
Supply of Skills from the INSETA Education Training and Quality Assurance, 97
SYNOPSIS, 14
The INSETA Sector Skills Plan Research Methods, 90
The INSETA’s Programme 1: Research and Benchmarking, 144
The INSETA’s Programme 2: Youth Education and Development, 155
The Insurance Subsectors and Employers in the Sector, 43
The Introduction of Pivotal Grants into the Insurance Sector, 30
The Management Category, 128
The Sales Workers Category, 130
The SME Training Vouchers Project, 184
The Supply of Skills, 91
Unemployment, 84
Page 217
U
Top Prioritised Critical Skills, 132
Training Interventions for the Supply of Skills into the Insurance Sector and its Impact, 101
Treating Customers Fairly Initiative, 79
Types of Funded Projects, 151

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