The concept of insurance training has developed in the region but (re)insurance companies need to invest in this area because lack of talents is a serious challenge facing the industry.
Transferring knowledge to the younger generation is a responsibility that all stakeholders share to ensure sustainable insurance industry in the region, said Africa Reinsurance Corporation (Africa Re) regional director, North, East Africa and Middle East Gamal Sakr.
“It is the role of (re)insurance providers to activate training and education in order to create a strong insurance industry capable of serving the region,” he said.
In recent years, the concept of training has developed in Egypt thanks to having diversity of operators in the market as well as the expansion in the number of insurance companies.
“The market in Egypt has a mixture of Arab, foreign and local, both state-owned and private, insurers,” said Mr Sakr. “This has largely contributed to supporting the training and education environment for insurance employees. The interaction between the different components served as a catalyst in various ways including the realisation of the importance of education and training.”
Training has gradually become an essential part of recruitment, he said. “In addition, companies started to acknowledge the need for training and education mainly because the shortage of manpower and skilled professionals is among the industry’s major common challenges,” said Mr Sakr.
Availability
There is currently a wide range of training and education facilities in the region, local and foreign, which enable the industry to develop their cadres’ skills, said Mr Sakr, who is also the Chartered Insurance Institute of London (CII) goodwill ambassador in Egypt.
“Aside from the already established local training institutions that are supported by the regulatory authorities or other parties, there are new training facilities,” said Mr Sakr. “This in addition to the availability of insurance veterans who have a long experience in the insurance field and willing to pass the knowledge to the new generation.”
In 1939, Egypt was the first Arab country to issue a law regulating insurance business. The country has also been a leader in the training field with insurers establishing the Insurance Institute of Egypt (IIE) in 1975, which quickly became affiliated with the CII. In 2010, the Financial Regulatory Authority (FRA) established the Financial Services Institute (FSI) to serve the non-banking financial sector in Egypt.
Development of education and trainingIn the early days, education and training was based on indoctrination and not on sound scientific foundations. “Training was mainly based on transferring knowledge from individuals who were experienced in the field of insurance. It was an individual approach and not based on scientific foundations or processes,” said Suez Canal Insurance Company marketing general manager Samir Mahmoud.
In 1976, after the establishment of the IIE, training began to take a systematic approach. “The IIE, being accredited by the CII of London, began to qualify local capabilities that supported the Egyptian insurance market and neighbouring countries with insurance competencies,” said Mr Mahmoud.
Later on, the establishment of the FSI, the educational arm of the FRA, gave additional boost to the education and training activity in Egypt. “The (FSI) offers training courses in all insurance fields. There is also a great focus on issues such as governance and training of senior managements of insurance companies.
The FRA has also made great efforts in educating the market on the new accounting standards,” said Mr Mahmoud, who is a certified trainer of the Milliman MicroInsurance Centre and a certified inclusive insurance trainer of the International Labour Organization.
Responding to market needs
Among its multiple training and educational activities that cover all aspects of insurance, the FSI offers training to professionals working in the insurance brokerage field, both individual and corporate.
“They are required to undergo a compulsory training course as a general insurance approach that focuses on sales, marketing as well as the technical concepts of insurance. The trainee will be subject to an exam after completing the training course and will be required to undertake another advanced training course after five years,” said Mr Mahmoud.
Training has developed from theory to practice, he said. “The current focus is on the applied side of insurance work. Specifically, by moving from the theoretical framework to the practical side and focusing on what the insurance market needs in the first place.”
There are companies that have training and development departments, and others that rely on training their staff in institutes. “But in general, all companies are increasingly interested in training their staff and enhancing their capabilities,” said Mr Mahmoud.
Investing in training
Shortage of human resources has always been an issue with the industry, said Mr Sakr. “The increase in the number of insurance companies is one reason. The other important reason is the migration of local talents to other markets, especially the GCC. Therefore, insurers should be willing to invest in improving their training and education efforts and set the necessary budgets for that purpose.”
Training of employees and fresh graduates is another motivation for attracting talents to join the insurance industry, he said. “Probably changing the mindset to cater for training needs was the biggest hurdle,” said Mr Mahmoud.
Africa Re organises the annual ‘Young Insurance Professionals Programme’ in collaboration with the London School of Insurance to sponsor young cadres from African markets, he said. “The outcome has been impressive. Over the past few years, we were able to form a distinguished pool of qualified young professionals who can be relied upon to one day become leaders in the insurance industry.”
Investing in training pays back, he said. “Overall, the benefit will be widespread to the sector as a whole.”
Challenges faced
The rapid pace of development in the insurance industry requires paying a constant attention to the tools of training and education, said Mr Mahmoud. “Following up on the scientific and technical development taking place in the field of insurance is important. This includes providing new training materials and curriculums.”
He said that the expansion of areas of specialisation requires continuous follow-up and constant updating. “There are new insurance products which we need to know more about. Furthermore, the emergence of new risks, such as cyber threats and natural catastrophes, requires expanding training in new fields of knowledge.”
The steady increase in the number of trainees is another challenge, he said. “This requires having sufficient number of qualified trainers licensed by the relevant authorities. Trainers are also challenged to know how to deal with technology and the new means of education, such as online training.”
Training is a priority
Training and education have not been a priority in the past. “The culture has changed significantly where companies are increasingly feeling the need for well-trained technical and administrative cadres who can undertake the tasks of work which nature has changed,” said Mr Mahmoud.
Companies are realising the need for training their staff and arming them with the necessary tools and skills that enable them to assume different responsibilities, he said. “Factors which helped in changing the culture towards giving more attention to training include mainly the severe competition among insurers. The quality of workforce makes a difference at the end of the day. In addition, the COVID-19 phase, which brought up more technology into the game, has dictated giving more attention to train and educate staff in new fields which require using modern techniques,” he said.
“AI, big data, social media and other new concepts require companies to work on giving more attention to education and training, especially for the young professionals; and keeping in mind the population they are targeting whose most are young. All these factors pushed companies towards investing in their education and training activities,” he said.
Looking ahead
Last May, the FRA launched the first professional diploma specialising in actuarial sciences and qualifying actuaries to pass international exams. Moreover, the FRA has cooperated with a number of universities to support the training of actuarial graduates so as to deal with the acute shortage of actuarial experts in the insurance market in Egypt. Such initiatives indicate that there is a growing attention being paid to the area of training and education as well as the realisation that there is a need for developing human capital.
Transferring knowledge is important to a sustainable insurance industry, said Mr Sakr. “Grooming young insurance talents in our region is necessary for succession planning. Times are changing and executives of insurance companies must plan for creating future leaderships. This hasn’t been a dominant culture in our markets but now this is the norm for companies which are willing to preserve their legacy in the market.”
Stakeholders including (re)insurers, federations and regulatory bodies, must cooperate to develop human capabilities. “Creating a pool of qualified professionals is necessary to develop the industry,” he said. M