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Human resource gap in the insurance industry

Partners, Siyanda Kunene and Dumi Makopo.

Partners, Siyanda Kunene and Dumi Makopo.

Published May 8, 2022


Tshepiso Tshabalala

[email protected]

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Partners, Siyanda Kunene and Dumi Makopo.

Johannesburg - The insurance and risk management sector, which forms part of the financial services industry, contributes to the South African economy. Yet, risk management studies may well not be common among young job seekers.

A survey conducted by KPMG looking into the South African insurance sector in 2021 indicated that the non-life insurance sector was worth R128 billion in 2020 = despite having lost a profit of R2.6bn in 2020 due to the Covid-19 pandemic. The Johannesburg Stock Exchange (JSE) reportedly found that black-owned insurance companies made up 2% of the multibillion rand sector in 2017.

Siyanda Kunene and his business partner, Dumi Makopo, established Kunene Makopo Risk Solutions (KMRS), a black-owned insurance and risk solutions company, in 2006, because they noticed that there was a dearth of risk management companies representing black communities, said Makopo.

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Makopo, born in Soweto but raised in the East Rand, studied Insurance risk management and economics at the University of the Witwatersrand. Then, risk management was not popular when he was still a university student in the late 1990s. He said that there were not more than 50 students in his class and that it was the only class available at the time.

Before joining ventures with Kunene, Makopo was employed by a company in the same sector, where he learnt all the fundamental skills. After leaving the company, he and Kunene joined forces.

Makopo said he expected the field of study to be fashionable over time, but that had not been the case.

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“In the early 2000s, the biggest talk at the time was about banking the unbanked. Coming from black family background, insurance was hardly spoken about. I thought to myself that there might be a large market of people that are not insured, and this was a need within black communities,” said Makopo.

“When we started, we did what everyone else did by selling what was already in the market. We then realised that this approach would not work for our company because several people specialise in that. We opted to build our own product or negotiate with underwriters to give an advert with whatever product was available at the time so that when we speak to clients, we could give them something they could not get elsewhere,” Makopo said.

However, KMRS' success did not occur overnight. Makopo said the first eight years of foundation were tough: they struggled for two and half years before acquiring a trading licence for their firm.

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He said there is more to insurance than funeral cover. “There are different layers to insurance. It is not just sales and marketing. There is a misconception that we are all about funeral cover.

As KMRS grew over 16 years since its establishment, Makopo, the co-owner and director of the brokerage firm noticed that the human resource gap in the sector grew with time, such that it is now difficult to find qualified risk managers. Makopo, therefore, encourages young people to consider venturing into the risk management field.

“When we are looking for candidates to employ, it is difficult to find candidates with an insurance degree. It is rare to find a young South African with this qualification. The shortage of skills in the insurance industry is evident. Human capital is abundant on the marketing and sales side, but technical insurance skills are scarce,” said Makopo.

In an effort to try to bridge the human resource gap, Makopo and Kunene joined forces with the Sector Education and Training Authority (Seta) to train young people who showed an interest in the sector.

“In previous years, we worked with Seta and developed training programmes for the youth. We had learners who started from the bottom and moved up the scale. They became interns and are now fully employed. We have trained about 20 learners for over two years,” Makopo said.

The insurance broker said KMRS aims to create jobs for young people who want to join the industry and are willing to learn regardless of their experience levels. “You would be surprised to know that there is a place for everyone in this industry.”

KMRS employs over 62 people, largely youth within the age range 21-30 years-old. The company hopes to become an employer of choice and have thousands of young employees on their books in the future. According to StatsSA, at least 67% of South Africa’s youth are unemployed.

Makopo said what sets KMRS apart from other companies is that it provides a comprehensive service to its clients and partners.

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