The move by local players in the insurance industry to establish the Insurance Institute of Botswana has been hailed by industry movers and shakers as long over-due and highly essential.
Stake-holders in the local insurance industry who attended the founding meeting of the institute’s establishment have welcomed the formation of the Insurance Institute of Botswana with open arms.
The Managing Director of Bramer Life Botswana, Regina Sikalesele-Vaka, expressed relief that finally the establishment of a regulatory body within the insurance industry will be put into action. According to Vaka, the industry has for a long time operated without such body despite the need for one, hence at times there was a bit of mix-up which could have under normal circumstances been easily fixed.
Though she acknowledged the presence of the Non-Bank Financial Institutions Regulatory Authority (NBFIRA) as an oversight regulatory body to the insurance industry, she was of the view that it had its limitations. “As an over-sight regulatory body, NBFIRA sometimes misses irregularities taking place within the industry, having our own body in addition will not only strengthen relations with government but will promote efficiency and transparency,” said Vaka.
According to Vaka, the establishment of the institute will be worth-while especially to customers and the industry itself as they will be assured of quality.
The chairperson of Botswana Short-term Insurance Underwriters Association, Douglas Heldsinger, also hailed the move to establish the institute as a positive one. Though he acknowledged that the move will require a bit of financial assistance from members in the industry in order to be fully established and effective, Heldsinger was of the view that the results will definitely surpass the efforts invested into it. “It is not the cost of establishing the institution that people should be worried about but rather, the cost of not establishing one that has more damaging implications," he said.
He contended that over the time it had become clear that the local insurance industry lacks professionalism, skills and growth, all of which clearly indicates that things cannot continue as they are because of the obvious expectations from the clientele and future development. The changes in the insurance industry, he says, are not only unique to Botswana but are a global phenomenon and because other countries are working around the clock to bridge the gaps it is only normal that Botswana insurance industry does likewise.
Because the institute will not only be restricted to the insurance industry, but will also cover related fields such as pension societies and others, the Executive Secretary of Botswana Pensions Society,Edna Dambe - who also sits in the institute’s steering committee - said the establishment will also come in handy to pension societies.
According to Dambe, the pension industry is a delicate one and needs to be handled with caution hence highly trained and professional personnel are needed in order to sell pension products to consumers. “The pension industry cannot afford any mistakes, our products deal with people’s future and once done cannot be reversible, hence the need for skills development,” said Dambe.
Dambe also said that the institute will also help in lobbying as it will bring different players within the field that will offer the technical side and input whenever possible. She cited a challenge they had last year in which they struggled to convince the regulatory body that it was not favourable to the industry but to no avail. “The regulatory body had proposed amendments to assets classes in which they wanted to lay down a prescriptive manner of investing into pensions, despite our protest, they stood their ground, had the institute been in place, things could have been better,” she said.
The Insurance Institute of Botswana is expected to provide and maintain a central organisation for members of the institute, to encourage and assist in the advancement of insurance education and knowledge and generally to promote any scheme which may tend to raise the standard of insurance in Botswana.
The institute is also expected to facilitate the development of strategic policy for insurance industry to facilitate and provide a platform for interaction between industry structures and the regulatory authority and to afford opportunities of communication among members, including the arrangement of social functions. Generally the institute’s purpose is to promote the interest of members.
The institute shall be affiliated to any institute or association or form part of any federation of associations, as approved by the board, provided that in it is beneficial to the interests of the institute. According to Dzigi Nganunu, the former Managing Director of Botswana Insurance Company who also sits in the institute’s steering committee, the institute is complementary to other existing insurance bodies and will revitalise the local industry. He indicated that the local steering committee bench-marked with countries such as South Africa and Mauritius which have existing insurance institutes and have a higher insurance market penetration than Botswana.