CEO champions innovation to attract uninsured citizens
The Insurance Institute of SA’s new head, Thokozile Mahlangu, plans to overhaul the sector to improve service, writes Lesley Stones
Thokozile Mahlangu manages not to roll her eyes when I recount frustrating conversations with insurance company call centres. "I wouldn’t say call centres are the voice of the insurance industry," she says, which is a line she may find herself repeating many times as the new CEO of the Insurance Institute of SA.
Call centres are the frontline that the public deals with, but the claims department is the real voice of the industry, she says.
"They make or break the company. It’s their job to live up to the claims that were made to the customer when they bought an insurance policy, and good service has become top of mind for the industry. It is a noble profession," she insists.
Despite insurance companies’ bad reputations, the small number of complaints that reach the ombudsman show that simmering ill will is out of kilter with the real levels of satisfaction, Mahlangu points out.
The Insurance Institute of SA is the industry’s professional body, and Mahlangu has an ambitious plan to raise the credibility of the sector and make it an aspirational career.
"My focus is to elevate the profession and elevate its perception and make sure we have leadership with the required innovative skills," she says.
She is the first black CEO in the organisation’s six-decade history, so it’s no surprise when she says that the industry is sluggish in transformation.
"One of the challenges we face is transformation at leadership level. The industry is still led by mature people, predominantly white and male," Mahlangu says.
"We have had a couple of appointments in the last two years of people of colour and females in senior roles so there’s a shift, but it’s not where we’d like to see ourselves."
Some companies are now identifying young black people and women to put through leadership programmes to ready them for senior positions, and the institute must ensure that appropriate training is available.
Several initiatives are under way. An executive management development programme will launch in 2019, at a soon to be established local branch of the African Leadership University of Mauritius.
"Their approach is very different from having lecturers at the front of the class. It’s practical, so people can study and complete a module and apply it immediately," Mahlangu says.
Insurance-focused degrees will also be offered nationwide through the Pearson Institute of Higher Education, and the institute is working with the Insurance Sector Education and Training Authority to give students year-long training at technical colleges. That will come to the market after all the due diligence is completed.
Mahlangu’s endgame is bigger, however. She would like to re-establish the college of insurance that the institute ran until 2006, when legislation prevented it from being a training organisation. Because the institute accredits members to the profession, it was barred from also setting their exams.
"We are talking to Pearsons and to various universities to make sure there’s a pool of institutes that offer qualifications, so conversations are happening across the country. But my big dream is to have the college back," Mahlangu says.
"We want to capture students early and show them there’s a platform you can venture into early in your career and highlight that it’s more than call centres, it’s about underwriting, understanding risks and helping clients to mitigate that risk."
She believes that the nobility of the insurance industry lies in its power to return a client to the position they were in before a loss and give them back their dignity and security.
"Their financial and social security and their sense of dignity get restored. And we bring financial security not only to an individual but to the economy as well," she says.
Currently, however, insurance touches just a fraction of the population, and Mahlangu agrees with an estimate that only 2% of township residents hold a policy.
"Where we haven’t succeeded much is taking insurance to the lower LSM levels and small and medium-sized businesses, and that’s a market we are trying to tap into. We haven’t got it right for various reasons," she says.
One reason is that the traditional distribution models just don’t reach those areas. Another barrier to entry is the collection of the monthly premium, because not everybody in the lower segment of the market has a bank account to allow direct debits.
Another issue is inconsistent cash flows, which make it hard to meet monthly payments without fail.
"They need a platform where they can skip a payment and catch up later, and we are not ready for that yet.
"Also, the terms and conditions are not clear for that market, so we need to find a means of using simple language without losing the technical meanings. That’s the balance you have to strike," she says.
"We need to have an industry that’s inclusive of the entire demographic and we need to have everyone participating in the economy. I’d love to see an insurer take a product to that market and really succeed in it."
The leaders in the market are all trying to design innovative ways to break into the vast market of uninsured citizens. But to do that the industry needs skilled people, who think differently from the old white men in charge.
"The challenges are a shortage of skills, transformation and the ageing workforce, and we have to mitigate these risks by providing a pool of people who are skilled," Mahlangu says.
The Insurance Institute of SA is working closely with a group called the Insurance Young Guns, set up by people under the age of 35 in the insurance industry who ask more senior professionals to share their knowledge with them.
"They have asked that we design programmes specifically for young people, and one of the skills will be creative thinking aimed at nurturing innovation within young minds and adding to the growth of the industry," Mahlangu says.