20 August 2013

Zambia: Employment Opportunities in Insurance Sector


ACCORDING to the labour survey of 2008, the insurance industry which was categorised under Financial and Insurance activities contributed about eleven per cent of the formal employment which stood at about 522 thousand.

This columnist is yet to obtain the report for 2012 as the labour survey is conducted every four years.

However, this cannot deter us from expounding the contribution of the industry to the formal labour pool which in turn is a reservoir for the Government to tap revenues in form of taxes.

Officiating at the launch of Basics of Insurance, The Zambian Experience book last month, the Permanent Secretary (PS) in the Ministry of Education, Science & Vocation and Early Education Patrick Nkanza, who was representing the Minister John Phiri, shared a lot of valuable thoughts especially on the conundrum between the relatively high Gross Domestic Product (GDP) growth vs. low unemployment levels.

"The paradox is how do you have a high GDP growth rate yet on the other hand you have high youth unemployment rate, there is a mismatch which needs to be resolved... .." he said.

The mismatch highlighted by the PS is across all sectors in the nation and insurance is not an exception. Creation of jobs is one of the key issues across the globe and insurance makes somewhat noteworthy contribution.

Factually speaking, the insurance industry has been one of the fastest growing industries in Zambia with an average growth of about twenty two per cent save for 2012 when a marginal growth of about three per cent was recorded.

In broader terms growth should correlate with increase in employment although this is not a phenomenon as statistics have proved.

The question now is where are these employment opportunities advocated in this column?

First and foremost the insurance industry comprises the regulators, insurance companies, intermediaries and many other support services such as actuaries, loss adjusters, and motor assessors etcetera.

We will start the analysis with insurance companies which are currently over twenty in number. Most, if not all of these have fully fledged departments such as underwriting, claims, finance, marketing, legal, human resource, administration and reinsurance, inter alia.

From the foregoing one can see that not only those qualified in insurance work in this sector but others with different professional skills still can find room in this exciting and 'softy' field.

Actually if one screens the industry under the microscope one can discover that majority of the employees have qualifications in other fields yet they still ably perform insurance duties presumably via job on training.

Talk of the graduates from the Copperbelt University or University of Zambia all these did not do degrees in insurance as none of these institutions offer degree programmes in insurance save for University of Lusaka which recently started offering a degree in Pensions and Insurance.

There are also plenty of grade twelve, business administration, marketing, economics, finance, accounts and many other business related programme graduates found in the industry.

When we take another dimension in specialist skills such as actuaries especially in Long Term insurance, this is an area which at present has a very high demand as most of these services are currently heavily outsourced overseas. Actuarial science is in fact one of the highest paying careers even in the developed countries.

In 2010 a study published by job search website Career Cast ranked an actuary as the number one job in the United States (Needleman, 2010).

Insurance companies do not do business all by themselves, they have partners they collaborate with called intermediaries. These can be brokers or agents.

In Zambia most of the insurance business in transacted through brokers. Again this provides a pool of opportunities in the labour market.

One of the less explored opportunities which many people have shied away is the area of insurance agents. These are tied agents who represent insurance companies.

Currently the law only permits an agent to represent one insurance company, that is, either a General Insurance or Life insurance but not both. The job of the agent is to connect a customer to the insurance company and gets a cool commission which can be a high as seventeen per cent.

Our friends in the western world have taken this business very serious unlike us in developing countries that are 'reluctant' to take up suck careers.

It seems those who are employed as agents work with an eye on another opportunity within the industry or better still other greener pastures.

I for one know a few people who are making it big as agents better than some permanent employees of insurance companies. One of the great advantages of being an agent is that one can still do other business.

Surely there is so much that the insurance industry is able to give in terms of employment opportunities than has been perceived in the past.

Well most of this information can be found in the book I wrote called 'Basics of Insurance, The Zambian Experience which is found at any Book world shop around the country or simply by getting in touch from the contacts below.

[The Author is a Chartered Insurer with nine years industry experience]

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