Insurance Institute of Zambia
Insurance, The Silent Pillar, The Peace of Mind
PIA-Registrar's Speeches
THE REGISTRAR'S SPEECH AT THE INSURANCE INSTITUTE OF ZAMBIA (IIZA) 1ST CERTIFICATE CONFERMENT DINNER
HELD AT SANDY'S CREATION IN LUSAKA ON 20TH JUNE 2009.
SALUTATION
I recall that the Institute bestowed me with a similar honour during its First Annual General Meeting held in Ndola.
Allow me, at this point, to recognise:
v The President of the Insurance Institute of Zambia, Mr. Justin Kabwe and his entire Governing Council
v Deputy Registrar, Pensions Mr Martin Libinga and PIA Staff
v The Directors and Chief Executive Officers of various Licensed Insurance and Pensions Entities
present or ably represented here
v The Esteemed pioneer members of the Insurance institute of Zambia, and
v May I simply say Distinguished invited ladies and gentlemen
v All protocol observed
It gives me great pleasure to witness the Insurance Institute of Zambia as it grows from strength to strength.
From what was a mere tea-break discussion idea in most insurance offices across the country a few years ago,
TODAY we are here to witness as the institute finds its feet and its right place in the industry.
Ladies and gentlemen, members of the institute, the journey ahead is still long and in fact it will at times
be very rough. Nonetheless, the first steps taken so far are the most significant and I am very confident that
you will reach your goal of attaining excellent professionalism in this industry.
CURRENT CIRCUMSTANCES
Empirical evidence available has shown that the Global Financial crisis has already had a negative impact
on Africa in terms of decreased investments, decreased exports and decreased employment levels.
On the African Continent's insurance sector, the crisis has led to;
Ø A decrease in demand for insurance" services and capital available for insuring risks on international markets
Ø Difficulty in renewing treaties related to insurance placement
Ø Higher premiums for re-insurance ~ Low up take of insurance-
insurance penetration is consistently below 5% of GDP(With the exception of Gabon,
South Africa and Lesotho); Africa's share in the Global Insurance market was 1 .69% in 2007
Ø Large proportion of the population falls into low income category which implies a limited disposable
income for insurance products
Ø Large reliance on compulsory based insurance products like third party motor vehicle insurance
and credit life Insurance ~ In adequate financial capacity and poor corporate governance practices
Reflecting on the local market the story is no different from that obtaining in Africa. However PIA has
witnessed a phenomenal growth in the past 7 years:
· The insurance industry has grown in terms of turnover volume; from K180 billion in 2001 to K800 billion
in 2008, more than 300%
· It has grown in terms of the quantum of claims settlement into the
economy; from K42 billion in 2001 to K208 billion in 2008
· It has grown in terms of the profits posted and dividends paid to shareholders;
· It has grown in terms of the number'of licensed insurers and reinsurers; from 6 insurance companies in
2001 to 12 in 2008
· It has grown in terms of the sheer numbers of licensed intermediaries plying
· the market; from 112 in 2001 to 140 in 2008
· It has grown in terms of the salaries and wages paid to employees of various insurance entities.
Sadly, ladies and gentlemen, the numbers of qualified practitioners has not grown proportionately
over the past (7) seven yea rs:
§ In fact the number of qualified loss assessors has been falling during these 7 years;
§ The number of practicing loss adjustors has remained at only 2 during these 7 years;
§ The industry has not produced a single Zambian actuary during the past 7
years.
As a regulator we are saddened to observe that at the time the growth indicators are so impressive we a
re faced with a diminishing cadre of insurance professionals. This is a threat to the growth.
Many an investor into the insurance industry cannot find suitably qualified underwriters to ably run their
insurance business enterprise. The PIA has in the past 7 insisted that the position of Chief Executive Officer
be first availed to Zambians before other nationals can be considered but our pool of insurance professionals
is very shallow and is quickly running dry due to:
· Inevitable attainment of retirement age
· Natural and unnatural wastage due to various pandemics.
· Dishonesty - the demonstrated failure to uphold utmost good faith and integrity
CHALLENGES FACING THE INDUSTRY
In order for the growth of the insurance sector to be meaningful to ordinary men and women in this country
it must be sustained. It must be consistently sustained by a vibrant and determined cadre of insurance professionals.
It is at the juncture that the efforts of the Insurance Institute of Zambia and those of the
Pensions and Insurance Authority coincide. The serious urgency of this matter cannot be postponed
to another time other than now.
The following are some of the challenges that as professionals you need to address and contend with:
Ø The institute must begin to promote the insurance profession by engaging high school curriculum
developers and the careers guidance unit of the Ministry of Education.
Ø Create insurance awareness among the greater number of people to overcome the market's natural
resistance and educational barriers
Ø Attain consistency with the International standards as prescribed by international professional bodies
Ø Strengthen the insurance regulatory structures and harmonise laws in the face of growing cross border
investment and transactions
Ø Financial restructuring including recapitalization of insurance companies to enhance underwriting capacity
Ø Adopt strategies for creating inclusive insurance(microinsurance to reach the informal sector and to meet
the needs of the market for affordable insurance products.
Ø Stop the senseless externalisation of premiums abroad as this practice is depriving this Country the
necessary needed resources for national development. In the past three years (2006-2008) Zambia has
externalised K474-9 Billion in reinsurance premiums.
WHAT IS THE WAY FORWARD
The way forward to mitigate some of these challenges will include;
Ø Building institutional and human capacity in the industry
Ø Promoting the establishment of pension and insurance syllabi at primary, tertiary and high learning
institutions and upgrading the existing learning institutions
Ø Promote a deliberate policy by the industry to contribute to the running of the training institutions
Ø Compiling and sharing insurance statistics to provide reliable data for actuarial studies which are essential
in developing new insurance products
Ø Strengthening the financial capacity of the existing insurers through increased capitalisation to enable them
operate soundly and compete effectively
Ø Encouraging entry of more insurers -with substantial financial strength, technological and industry know how,
good risk management, and financial management skills
Ø Adopting a robust proactive policy on micro insurance, the broader goal of the financial inclusiveness
Ø Establishing a forum to monitor the developments in the insurance and to continue the dialogue among
stakeholders in the industry
The insurance practice cannot continue to slumber but must awaken and equate itself to other professions
that maintain robust accreditation systems and engage in continuous professional development (CPD).
The Pensions and Insurance Authority regrets to note that some of our own nationals that have been elevated
to senior management positions have failed to live up to their employers' expectations. Often because they
have tended to sit back in contentment with the qualifications attained several decades ago.
The field of insurance is dynamic as such its practitioners cannot afford to stagnate in contentment.Clearly
a professional that does not undertake continuous professional development risks being left by the wayside
as the insurance industry continues to evolve.
Any profession will only gain as much recognition as they rightfully earn. It is therefore timely for the
institute to get organised prior to considering statutory recognition comparable to that bestowed the
Law Association of Zambia and the Zambia institute of Chartered Accountants.
The institute should be able to clear its members for all jobs in the industry to stop this invasion by
non-insurance professionals.
Ladies and Gentlemen’s, The Pensions and Insurance Authority keen awaits the institute
to play its role in encouraging sustainable professional development. I expect quantum growth in the
number of high flying insurance innovators with unblemished professional
integrity - for these are the attributes that the insurance profession is recognised for internationally.
In my concluding remarks allow me to quote what the former president of the Republic of Tanzania
His Excellency Benjamin William Mkapa said when he was being conferred with a Honorary Doctor
of Law Degree at the National University of Lesotho on 23rd September 2005.
"Firstly, Africa is increasingly being marginalised from the benefits of globalisation. In 1950 our
share of global trade was 3 per cent. Today it is hardly 2 percent. It is us Africans who need to
re think our situation and come up with innovative solutions to re engage profitably into the global economy;
Secondly, Africa is playing in a game where the playing field is not level, and the rules of the game were
established long before we became independent players. We Africans need to rethink how to
make the best out of this unfair situation" End of quote.
I wish the institute and all its membership especially with those being conferred with
professional designation unfettered success!
I thank you for your patience.
xxxx
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THE REGISTRAR OF PENSIONS AND INSURANCE AUTHORITY
PROFESSIONAL MEMBERSHIP STATUSES
The President of the Insurance Institute of
Governing Council Members of the Institute
Distinguished Ladies and Gentlemen
May I simply say, all protocols observed
I am humbled and most grateful for the honour bestowed upon me to grace this important occasion in the calendar of the Institute.
I vividly recall that in March 2006 when I officiated at the Certificate Presentation ceremony for Sales Agents I challenged the President
and his Council to be more proactive and focused on the most important objectives of the institute; to enhance professionalism in the
pensions and insurance industry. The seminar was but the first step toward actualizing this noble objective that we are proudly witnessing today.
In my speech then I had encouraged all practitioners in the industry that is underwriters, claims handlers, insurance brokers, insurance agents,
sales executives, pensions administrators and everybody remotely connected to the or pursuing insurance courses at the
Membership to a body like the institute has a lot of advantages and the privileges besides uplifting one’s professional standing in
society as a member of a professional body. As a matter of fact, your membership to a professional body like the institute will greatly assist in:
· establishing a database of professionals in the industry;
· assists to identify the existence of gaps in skills;
· identify and implement approaches for skills enhancement
· prescribe and develop activities that could form part of employer training programmes and manpower capacity building;
· assessing and responding to the emergent needs for continuous professional development.
The Pensions and Insurance Authority and together have established a very good working relation in furtherance of developing appropriate
skills because of the importance that PIA attaches to professional development the institute as a strategic partner is now represented at the
Technical Committee of the Pensions and Insurance Authority Board.
The amendment of the Pensions Scheme Regulation Act and the Insurance Act in December in 2005 has transformed PIA into an autonomous
body with more powers and to effectively regulate and supervise the industry. As a consequence this hassled to an increase in levels of
compliance following the introduction of additional sanctions on defaulting entities. Given that the process of regulation is continuous PIA is
now considering the enhancement of the minimum capital for insurers and the implementation of measures designed to oblige sponsors
of pension schemes to remit members contributions on a timely basis.
Furthermore, PIA with the assistance of our cooperating partners has secured funding for technical assistance from the World Bank through
the First Initiative to carry out capacity building which includes among other things prescribing Zambia Insurance Prudential Standards and the
Pensions Prudential standards for Pensions and Insurance Industry. These actions are outlined in strategic plan and conform to our mission statement:
“ to regulate the conduct of pensions and insurance industries in order to protect the interests of pensions scheme members,
insurance policyholders and foster the industries growth, development and stability.”
At this point I wish to restate that PIA attaches great importance to the professional development. A cadre of professional workers
improves services delivery and ultimately reduces the frequency of complaints from the insurance public and adds value to the companies
by the reduction of costs associated with disputes.
Ladies and Gentlemen, without underplaying the importance of experience, I must emphasize that experience alone in the absence of commensurate
professional qualifications is not good enough.
We must bear in mind that as business practices continue to evolve in a world which is now a global village and technologically challenged everyone
must upgrade their professional standing in order to keep abreast and provide qualitative service to the public.
Mr President today marks the marks the beginning of a new era for practitioners in our pensions and insurance industry. The Insurance Institute
of Zambia confer a hierarchy of membership designation on deserving members, for achieving various professional prerequisite attainments
such as completion of Certificates, Advanced Certificates, Diplomas, Advanced Diplomas from institutions that will be recognised by the
Governing Council of the Institute. These professional designations would have to be supported by sufficient relevant experience. As we are all
aware insurance like other professions also values the benefits of having experienced professionals.
In line with international standards and best practices the institute will confer students membership, Ordinary Membership, Associateship and Fellowship.
These membership classifications have bee developed to provide an effective benchmarking tool for insurance practitioners.
In addition the institute has designed a Job Profile and Competency Framework to provide signpost of the minimum levels of competences required f
or each role in the key critical areas of insurance management, underwriting, claims, insurance broking, pensions administration,
insurance consulting and actuarial practice.
The criteria to be established is that members who will be conferred would be able to demonstrate clear progression in the insurance courses that
bear the recognition of the Council of the Institute will be conferred with the appropriate designations. The accreditation will take cognizance of each
individual profile and subsequently facilitate the planning for future career development in insurance.
I have been reliably informed by the President that accreditation will be on annual basis and will subject to renewal at every beginning of the year,
the Pensions and Insurance authority will adopt and make it a requirement for licensed entities to comply with this
Job Profile and Competency Framework once formalized and fully developed. Approval of Appointments to management positions
which will in future be based upon meeting or exceeding the minimum criteria established by the Council of the Institute.
The challenge for the institute is to broaden the categories based on various specializations such as Certified Underwriters (Life), Certified
Underwriters (General Insurance), Certified Claims handlers, Certified Brokers, Certified Pensions Administrators, Certified Insurance Loss adjustors,
Certified Insurance Agent, certified Reinsurance Underwriter and the like.
Ultimately this would assist in avoiding the situation where none professionals get appointed merely on the basis of their experience.
This will prevent mistakes of the past where expatriates with no discernible qualifications and experience were employed and eventually
frustrate better qualified and experienced Zambians.
While some of you may not be aware the pensions and insurance authority issued a circular on 11th august 2004, to:
All insurance companies
All insurance broking companies, and indeed
All pensions fund managers
A circular among other things endeavors to promote the empowerment of Zambians in key positions in the industry. I am happy to report that
for the past four years PIA has not approved any appointment of expatriates as a principal officer in the industry. Therefore, the Authority seeks
to appeal to Zambians to rise to the challenge by aspiring and attaining very high standards of professionalism in order .for you to benefit
from PIA’S progressive policies, This position is not only UNIQUE to Zambia, but it is well entrenched in this region.
The challenge is for the institute is ensure continuous and sustained development of the skills of its members in the industry
in all areas of insurance practice and pensions, risk management, loss adjustment, medical underwriting, pension administration,
custodialservices etc. Also of critical importance the institute must encourage, inculcate and demand integrity from its membership as
one of the key benchmarks.
Now days people get good jobs not only based on their professional credence but most important for their integrity, Once you mess up
with your integrity because of your unethical conduct in a highly sensitive industry like pensions and insurance for example forge
professional qualifications, embezzle money, settle fictitious claims, back date cover notes, etc it will be difficult to secure a credible position
in the industry and you have inevitable kiss good bye to this profession
Furthermore the Institute is challenged to assist in identifying companies that are not encouraging professionalism and
professional development and report such entities to PIA for appropriate action.
v Increasing access to quality insurance training by allowing other TEVETA Licensed bodies to offer tuition whilst the Institute could
play the role of the examining body. This would increase output of insurance graduates, in readiness to take up various challenges in the market.
v Organize and hold national symposiums on various issues affecting the industry similar to the public discussions that was held last year
on the split of insurance companies into long term and general insurance
v The introduction of specialised professional training for Loss Adjustors Adjustment, risk management and actuarial science.
v Facilitate a robust Continuous Professional Development (CPD) programme to deepen the development of insurance profession in
v The development of a credible system of accreditation of the various stakeholders in the insurance industry.
v The pivotal role of being a watchdog against both local and foreign threats to the stability, growth, development of the pensions and insurance
industry’s contribution to the economy of Zambia by setting high standards and best practices for professional.
v Must coordinate with and affiliate to other training centers in the region to benefit from a large pool of skills
Ethical issues have taken centre stage in all professions and the Institute must therefore develop a code of conduct for its membership. PIA and public
expect high standards of service delivery.
Today’s consumers are more knowledgeable and will not accept second rate services. We at the Pensions and Insurance authority are convinced
that your professional membership will increase customer confidence through qualitative and honest Service delivery.
It is now my singular Honour and privilege to officially declare the launch of the Professional Membership Designations of the
insurance
