Insurance industry players have established the Insurance Institute of Botswana (IIB), a professional membership body aimed at promoting skills development and professional conduct among members engaged in the sector.
As the insurance market in Botswana has grown significantly with more insurance companies being established, experts have noted that there is lack of skills among the citizens. Currently there are 199 insurance service providers in Botswana including 175 brokers, 12 short-term insurers, nine life insurers and three re-insurers registered under Non Banking Financial Institutions Regulatory Authority (NBFIRA).
Speaking at the consultative meeting on Tuesday, IIB Chairman Dziki Nganunu said the insurance industry had changed with times so there was a need for development of skills and training. “The insurance industry has grown tremendously and has changed with times so we have seen the need to train the insurers to equip them with skills,” he said. He added the institution would assist in the advancement of insurance education and knowledge, and promote schemes, which would raise the standard of the insurance profession in Botswana. The institution would also facilitate and provide platform for interaction between industry structures and the regulatory authority.
Nganunu said although the insurance industry in Botswana is growing rapidly there is less participation of Batswana in this industry. “We have many companies that are coming from outside, Batswana are not taking any initiatives to take their companies to outside markets, so the industry is not growing as fast as it should,” he said.
Nganunu also noted that the institute would work with tertiary education institutions to offer insurance course education and training.
“The insurance penetration to other markets is still low because the industry is faced with a challenge of lack of skills and training,” he said. Nganunu added that they were expecting to register about 70 corporate members. The institution is expected to be operational once Botswana Qualifications Authority (BQA) has approved all necessary requirements.
Experts said that there is ample potential for the short term insurance business to grow in Botswana as less than one percent of the population is covered.
According to chief executive officer of Old Mutual Botswana, Jack Bekker the low insurance penetration in Botswana and Africa provides significant opportunities for the industry.
“There is great potential for growth on the African continent, given the low insurance penetration and the expected increase in middle class households.
“Short term insurance penetration in Botswana is estimated at less than one percent, with the average for the continent outside South Africa estimated at below three percent,” said Bekker at a ceremony held last year to mark the rebranding of Mutual and Federal Botswana to Old Mutual Botswana.
According to the Non Banking Financial Institution Regulatory Authority 2013 Annual report, there were twelve primary insurers licensed to underwrite general insurance business as at March 2013. The insurance business was led by the property market, followed by motor insurance with a total premium of P1.2 billion.