Insurance industry 'nears saturation
Keikantse Lesemela | Friday November 21, 2014 14:11
Botswana hosted the Organisation of East and Southern Africa Insurers (OESAI) conference in Gaborone this week.
In an interview with BusinessWeek Chairman of OESAI Botswana Organising Committee, Dziki Nganunu said the insurance companies in Botswana need to look for markets outside Botswana.
He said Batswana seems more comfortable with their market and they are reluctant to explore international markets to expand their business.
“The industry is becoming saturated but Batswana are not exploring more market opportunities in order to expand their businesses,” he said.
Currently there are 199 insurance service providers in Botswana including 175 brokers, 12 short-term insurers, nine life insurers, and three re-insurers.
Nganunu also explained that the insurance penetration to other markets is still low because the industry is faced with a challenge of lack of skills and training.
“In most countries there are institutions offering insurance studies but it’s not the same case in Botswana. We need to have insurance training institutions in Botswana,” he said.
However he said they are in the process of establishing an institution to offer insurance training.
“For us to solve these challenges we need an institution that offers training on insurance.
“University of Botswana does not offer studies on insurance. We are hoping that probably by the second quarter next year we will be having that institution,” said Nganunu.
OESAI secretary general Eunice Ndathi said Batswana should open up and explore other markets rather than waiting for foreign companies to come and operate in Botswana.
“Batswana are a bit behind when it comes to insurance underwriting, so they need to be vibrant and be equipped with skills so that they would be competitive in the industry,” she said.
She said most companies are eyeing the Botswana market due to the countries relaxed laws.
“Investors from outside are eyeing Botswana due to its relaxed laws and almost all the insurance companies in Botswana are led by foreigners. Hence, Batswana need to be vibrant,” said Ndathi.
Ndathi also highlighted that these challenges can be solved through adequate training and skills development.
“ We need to enforce more training and skills development in Botswana in order to improve the industry.
“Through networking and interactions with experts from various countries, Batswana are privileged to learn and be equipped with skills,” she said.
She said there is a serious shortage of the skills necessary to fully develop the insurance industry in Africa.
“Skills that are currently in short supply include actuaries, insurance accountants, software developers and insurance professionals.
“Therefore African companies find themselves competing for qualified resources with multinationals from developed countries,” she said.