NBFIRA presentation at AIO Conference on “Professionalizing Life Distribution, The Key to Growing and Sustaining the Life Insurance Industry”.
As part of its stakeholder engagement efforts, the Non-Bank Financial Institutions Regulatory Authority (NBFIRA) participated at the AIO Conference themed; Professionalizing Life Distribution, The Key to Growing and Sustaining the Life Insurance Industry.
Participating as a panellist, Mrs. Matlakala V. Raphaka, Director of Insurance informed the conference about the significance of the theme to the regulator and industry players, as it compels the sector to undergo a transformation in order to be different. This will include enhancing the acquisition of appropriate qualifications, skills and competencies amongst intermediaries. It also means displaying professional ethics and integrity, ensuring the fair treatment of customers, adhering to set service standards, acting with the customer’s best interests in mind to name few.
Mrs. Raphaka reminded the audience that we operate in a global world, therefore the impact of the disruptive technology such as artificial Intelligence and robotics cannot be ignored as it has created a diverse and complex business environment. She posed the question of the readiness of local industry players to harness its strengths while simultaneously mitigating associated risks and their impact on business operations. She further stated that innovation is critical to business success. Only firms that adapt swiftly to change that are bound to succeed.
Raphaka also elaborated that the Life insurance industry plays a pivotal and unique role not only in the delivery of safety nets to cater for mortality, longevity and morbidity risks for individual households and corporates, but the industry also provides stability and liquidity to the financial markets and is a notable contributor to the economy as a whole. It is therefore important that they preserve its value-add by developing strategic interventions that are intended for the continued growth of the life insurance market.
Raphaka proposed strategic interventions that are geared towards value-adding growth in order to move away from the Agent Workforce Model life insurance distribution channel that has been used in the past. These interventions include but are not limited to shifting from part-time toward full-time career-focused Agents who will focus on developing themselves into business leaders; and developing inspirational field leaders will focus on developing agents for long term success thus moving from mass recruitment to controlling the talent pool. She further articulated the need for strict adherence to the code of conduct which will produce principled service which will lead to companies conducting their business in good faith and objectively.
In closing, Raphaka emphasized the need for companies to prioritize research and consumer education in order to empower the customers to make informed decisions which in return would allow for development of inclusive products that cater for the bottom of pyramid customers. also called on companies to invest and develop appropriate digital service model platform to cater for both Agents and customers and also develop a commission payment model that will address the issue of lapses due to the upfront annualized commission payment that is currently practiced in the local market. According to her, these proposals are not exhaustive, but they provide the basis for effective and efficient delivery of insurance service which is necessary to cement stakeholders’ confidence and for national development.
