"Working together for a skilled tomorrow"
PRESENTATION
PORTFOLIO COMMITTEE ON LABOUR
18 March 2003

Mr. Nelius Volschenk: Chief Executive Officer
Mr. Eugene Zeeman: Vice-Chairperson of Council
TABLE OF CONTENTS

INTRODUCTION TO INSETA 3
Background 3
Insurance Sector – A Brief Overview 3
Corporate Governance 7
Staff Composition 9

NATIONAL SKILLS DEVELOPMENT STRATEGY 10
Objective 1: Developing a Culture of High Quality Lifelong Learning 11

Objective 2: Fostering Skills Development in the Formal Economy for
Productivity and Employment Growth 19

Objective 3: Stimulating and Supporting Skills Development in
Small Businesses 23

Objective 4: Promoting Skills Development for Employability and
Sustainable Livelihoods through Social Development Initiatives 24

Objective 5: Assisting New Entrants into Employment 24

3. CONCLUSION 29

GLOSSARY 30

INTRODUCTION TO INSETA
Background
The Insurance Sector Education and Training Authority (INSETA) was established on 20th March 2000 as one of twenty-five Sector Education and Training Authorities. INSETA promotes and represents the training and development interests of the insurance sector of the economy in terms of the skills development legislation.
Our vision is to provide quality skills development for sustainable business growth.
Our mission is:
To develop an integrated and aligned strategy for skills development.
To contribute to the achievement of national skills development.
To encourage a competent and productive workforce in the industry.
To communicate, represent and involve all stakeholders.
The INSETA represents the following constituents within the insurance sector:
Short-term insurance
Life insurance
Insurance and Pension Funding
Risk management
Health care benefits administration
Unit trusts
Funeral Insurance
Reinsurance
Pension Funding and
Activities auxiliary to Financial Intermediation
Insurance Sector – A Brief Overview
The insurance sector is a rapidly evolving, growing and developing major player in the South African economy. Approximately 6 000 industry employers, with an estimated number of 95 000 employees are registered with the South African Revenue Services, of which just more than 3 000 pay the Skills Development Levy. INSETA represents an industry with a very wide range of employers, many of whom are very small (about 10 employees) and very large employers (in excess of 13000 employees). The majority of the workforce represents skilled and highly skilled employees.
A snapshot of the Insurance Industry employment profile, skills needs/gaps and the factors influencing change in the industry reveals the following – information as per INSETA Sector Skills Plan dated December 2002:
EMPLOYMENT PROFILE (SECTOR WIDE) BY GENDER

Male
42%

Female
58%

EMPLOYMENT PROFILE (LARGE EMPLOYERS) BY GENDER

Male
43%

Female
57%

EMPLOYMENT PROFILE (SMALL/VERY SMALL EMPLOYERS) BY GENDER

Male
34%

Female
66%

EMPLOYMENT PROFILE (SECTOR WIDE) BY RACE AND GENDER

African
(Male)
(Female)
25%
(13%)
(12%)

Coloured
(Male)
(Female)
14%
(5%)
(9%)

Indian
(Male)
(Female)
8%
(4%)
(4%)

White
(Male)
(Female)
53%
(20%)
(33%)

EMPLOYMENT PROFILE (LARGE EMPLOYERS) BY RACE AND GENDER

African
(Male)
(Female)
25%
(13%)
(12%)

Coloured
(Male)
(Female)
16%
(6%)
(10%)

Indian
(Male)
(Female)

8%
(4%)
(4%)

White
(Male)
(Female)
51%
(20%)
(31%)

EMPLOYMENT PROFILE (SMALL/VERY SMALL EMPLOYERS) BY RACE AND GENDER

African
(Male)
(Female)
22%
(9%)
(13%)

Coloured
(Male)
(Female)
2%
(1%)
(1%)

Indian
(Male)
(Female)
5%
(3%)
(2%)

White
(Male)
(Female)
71%
(21%)
(50%)

OCCUPATIONAL GROUPS (SECTOR WIDE) BY RACE AND GENDER

MALE

Occupational Group
African
Coloured
Indian
White

Senior Officials and Managers/Owner Managers
Professionals
Technicians
Clerical/Administrative
Service Workers
Labourers
1%
1%
6%
8%
10%
3%
1%
1%
4%
7%
2%
0%
1%
1%
2%
3%
3%
0%
13%
5%
12%
6%
11%
0%

FEMALE

Occupational Group
African
Coloured
Indian
White

Senior Officials and Managers/Owner Managers
Professionals
Technicians
Clerical/Administrative
Service Workers
Labourers

0%
0%
3%
9%
6%
2%
0%
0%
3%
9%
2%
0%
0%
0%
1%
5%
1%
0%
6%
5%
12%
26%
0%
0%

EDUCATIONAL PROFILE

The majority of employees hold at least a Matric Certificate and many hold post-Matric (tertiary) qualifications. Thus the majority of the workforce represents skilled and highly skills levels. There are very few unskilled employees in the Sector.

FACTORS INFLUENCING THE SECTOR PROFILE

Employment Equity High Level Skills Management & Ownership Female Dominance Organisational Size Distribution Disability Restructuring and Outsourcing

FACTORS INFLUENCING CHANGE

Policy and Legislative Factors
FAIS, Long-Term Insurance Act, Corporate Governance, National Skills Development Strategy and Employment Equity,
Economic Factors
Incentives and Trial Commission, Financial Security Emanating from Corporate Governance, Market Volatility/Low Investor Confidence/Higher Interest Rates, Financial Disintermediation, Mergers & Acquisitions, Black Economic Empowerment/Affirmative Procurement/Employment Equity
Social Factors
HIV/Aids, Changing Customer Needs, Using Market Segments to Integrate Marketing with Social Upliftment, Customer Churn, Unemployment/Poverty/Crime
Technological Factors
e-Technology and e-Commerce, Software Programmes Targeted at Customised Packages, Telecentres, Computerised Administration, Using Information Communication Technology as a Distribution Model
Environmental Factors
Impact on Payouts and Impact of Liability

KEY TRENDS IN THE INSURANCE INDUSTRY

Corporate Governance and Regulation, Risk Management in the Short-Term Insurance Industry, Loss Adjustors, Reinsurance Industry Developments, 11 September 2001, Standardisation, Market Volatility, Short-Term Insurance Market Consolidation and Contraction, Globalisation, Terrorism

TOP SECTOR SKILLS PRIORITIES

Large Employers
(1) Leadership and Management Skills – 40% (2) PC Literacy – 24% and Selling Skills – 24% (3) Product Knowledge - 13% (4) Customer Care – 11% (5) Company Procedures – 10% and Finance – 10%
Small Employers
PC Skills, Technical Skills, Client Services, Communication Skills, Compliance Training, Marketing, Corporate Governance, SMME Management


SECTOR DEMANDS IN TERMS OF SKILLS, EDUCATION AND COMPETENCIES FOR EMPLOYEES

1. High-level and Specific Skills 2. Tertiary Education in order to enter the Industry 3. Operational Skills 4. Technical Development Skills 5. Individuals able evolve to meet new market forces and new customer demands & expectations 6. A new breed of Financial Intermediary who are able to build responsible and prosperous relations with clients in all market categories

Corporate Governance
A Council, which comprises of organized business, organized labour and the State, govern the affairs of the INSETA. SETAs are registered as public entities and as such comply with the provisions of the Public Finance Management Act and other applicable legislation.
From its day of inception, INSETA’s governing Council and the INSETA Management identified good corporate governance as one of the critical success factors and agreed that INSETA will at all times set itself only the highest standards that comply with best practice in this regard. As such, INSETA has implemented the following governance structures/elements:

A governing Council with an approved Constitution (which is currently under review)
Council Committees with Terms of Reference – chaired by an INSETA stakeholder
Audit Committee with an Audit Charter – chaired by an INSETA stakeholder
Executive Management Committee and with various Sub-Committees, with Terms of Reference – Sub-Committees are chaired by an INSETA stakeholder
Regional Forums with Terms of Reference – chaired by an INSETA stakeholder
Code of Conduct for all Council-, Council Committee-, EXCO-, EXCO Sub Committee members, and INSETA personnel
Voluntary Code of Conduct for all Service Providers
Internal Audit Function, including risk management with Internal Auditors (Gobodo)
External Auditors (Auditor-General)
Fraud Prevention Plan
Full compliance with the Public Finance Management Act
Policies and Procedures
Financial Policy, including Operational Procurement
Project Procurement Code
IT Policy
Employment Policy Manual
Grievance and Disciplinary Manual
Internal Administration Procedures Manual
Project Governance Framework
Contracts and Service Level Agreements with main service providers
Business Plan and Budget, with Annual Sector Skills Plan Targets
Sector Skills Plan
Annual Report, with Audited Financial Statements submitted to the Minister of Labour and tabled in Parliament
Memorandum of Understanding with the Department of Labour
Quarterly Reports – measuring the performance of INSETA on certain indicators - submitted to the Department of Labour
Member of the SETA Forum and NSDS Forum, chaired by the Department of Labour
Steering Committees with main service providers, Deloitte&Touche (Financial and IT Management) and PricewaterhouseCoopers (Project Management)
Project Finance Steering Committee with PricewaterhouseCoopers and Deloitte&Touche
Performance Management System for all INSETA personnel, including the Chief Executive Officer
INSETA is also currently investigating the implementation of a Reputation Management Framework and a holistic Performance Measurement Framework
It should be emphasized that at the heart of INSETA’s corporate governance lies an integrity-based approach, which manifests itself in the organizational and individual culture, principles and values.
It is also important to mention INSETA’s approach to the implementation of the Skills Development Act and the National Qualifications Framework in the Insurance and Related Financial Services Sector. This includes the following characteristics:
Consultation and inclusivity, which leads to buy-in and co-ownership
Partnership with Industry stakeholders
Business model
Professional business practices vs. Bureaucracy
Transparency and good Corporate Governance
Innovation and creativity
Leadership and guidance
Practical support, assistance and service
Projects as a means to implement the INSETA Sector Learning Strategy and to address major skills needs – also through deliberate interventions, build capacity and add value.
INSETA’s particular business model was approved by the INSETA Council At the heart of this model is Council’s decision to outsource certain functions (Financial & IT Management, and Project Management) to expert private sector service providers, namely Deloitte&Touche and PricewaterhouseCoopers. A proper and thorough public tender procedure was followed prior to their appointment. The fundamental reasons for this decision were:
INSETA personnel can concentrate on its top three core functions, namely Skills Development, Quality Assurance and Learnerships
It follows international best practice
It represented and contributed to good corporate governance, including limiting risk
Cost efficiency
Specialist expertise, especially in PFMA-compliance and project management
IT-system, including Skills Management System was too costly for INSETA to develop or buy as an individual SETA. The system is shared with several other SETAs serviced by Deloitte&Touche, and represents coordination/cooperation and knowledge sharing with these SETAs. It includes components for SD Levy information, Skills Development Facilitators, Workplace Skills Plans, Annual Training Reports, Quality Assurance and Learnerships – all of which is aligned with the SAQA National Learner Record Database.
Effective, speedy delivery and implementation imperatives
Infra-structural capacity
Access to global resources of main service providers
It also led to a skills transfer to both INSETA personnel and people in the Insurance Sector, especially with reference to project management skills and financial management skills
INSETA’s approved organizational organogram is attached as Annexure 1.

Staff Composition
INSETA’s staff compliment in terms of the organogram is as follows:

Position

Name

Race and Gender

Chief Executive Officer
Manager: Skills Development
Manager: Quality Assurance
Manager: Corporate Services
Manager: Learnerships
Consultant: Skills Development
Consultant: Quality Assurance
Consultant: Quality Assurance
Consultant: Learnerships
Learnerships Administrator
PA/Office Administrator
Secretary: Skills Development
Secretary: QA & Learnerships
Receptionist

Nelius Volschenk
Shirley Steenekamp
Glen Edwards
Vacant
Approved - To be established
Lynette Mentor
Neesha Naidoo
Nathan Seotsanyana
Saber Patel
Pam Erasmus
Lyn Cain
Viola Merime
Debby Partridge
Laverne Ogle

White Male
White Female
White Male
--
--
Coloured Female
Indian Female
African Male
Indian Male
Coloured Female
Coloured Female
Black Female
White Female
Coloured Female

Note:
INSETA is fully committed to the Employment Equity Act and the Skills Development Act and will endeavour to achieve the objectives of these Acts in both the employment and development of its personnel. Any future appointments, resulting from vacancies or the creation of new jobs will also address and promote these ideals.

2. THE NATIONAL SKILLS DEVELOPMENT STRATEGY

I would now like to report on INSETA’s successes and challenges as measured against the five objectives of the National Skills Development Strategy.

The priorities of South Africa’s Skills development programme and indicators to measure progress are set out in the National Skills Development Strategy: April 2001 to March 2005. The National Skills Development Strategy (NSDS) sets out the vision, principles and objectives of the national skills strategy. The five objectives identified to drive the national skills strategy are:

To develop a culture of high quality lifelong learning

To foster skills development in the formal economy for productivity and employability

To stimulate and support skills development in small businesses

To promote skills development for employability and sustained livelihoods through
Social development initiatives

To assist new entrants into employment.

OBJECTIVE 1:
DEVELOPING A CULTURE OF HIGH QUALITY LIFELONG LEARNING

INSETA stakeholders agreed that the first step in developing a culture of high quality lifelong learning is to facilitate the development of a framework of high quality learning through a delivery system that enhances the level of skills in the workplace and the Insurance Sector at large. This was done by INSETA by being accredited as an Education Training Quality Assurance Body during September 2001.

The accreditation of learning providers plays a crucial role in the achievement of the overall goal of quality lifelong learning in the Insurance Sector. INSETA has developed an Accreditation Policy and Guidelines with checklists and templates, and assist/support applicants through extensive pre-accreditation visit. INSETA has designed special accreditation procedures for SMMEs – in line with their own unique needs and provided assistance in their accreditation process. The sector is served mainly by in-house providers (employers), with a few private providers specialising in insurance specific training – approximately 100 in total. Up to 13 March 2003 INSETA has accredited 17 providers with another 11 in process. Of the 28 providers, 6 are SMMEs.

INSETA has further supported employers and service providers in the training and development of 650 assessors with more assessor and moderator training planned in the near future. An Assessment and Recognition of Prior Learning (RPL) Policy has been approved by Council, and user-friendly guidelines against the Policy has been developed and made available to employers/learning providers to assist them in this process. INSETA is also in the process of exploring the establishment of an Assessment Centre to assist our employers, especially the SMMEs with this very important component of National Qualifications Framework (NQF) implementation.

The identification, design and development of industry-specific qualifications is another vital component of the NQF, which INSETA addressed through active support to the Financial Services Standards Generating Body (FS SGB). At the establishment of INSETA no NQF-qualifications were registered with the South African Qualifications Authority (SAQA). Since INSETA’s intervention in November 2000 to support the generation of Unit Standards and Qualifications, seven qualifications, across all Sub-Sectors have been registered. It should be noted that SAQA used INSETA’s qualifications format as a benchmark. The qualifications are as follows:

National Certificate in Insurance Administration – Level 2
National Certificate in Insurance – Level 3
Five Level 4 National Certificates in:
Unit Trust Investment
Health Care Benefits Administration
Long-term Insurance
Long-term Insurance: Risk Management
Short-term Insurance

Two more qualifications were submitted to SAQA, namely National Certificate in Risk Management at Level 4 and a National Certificate in Wealth Management at Level 5. Currently qualifications at Levels 5 & 6 are being developed. INSETA also submitted Fundamental Unit Standards for Levels 5 & 6 have been submitted to SAQA.

As a result of the general inadequate Maths and financial skills levels in South Africa and the necessity of it in many jobs in the Insurance Sector, INSETA approached SAQA to phase-in Maths from Level 1-4 in our Sector over a nine-year period. This will prevent amongst other things, the non-completion of Learnerships at these levels. SAQA approved this request and gave INSETA the concession. In turn INSETA undertook to actively raise the levels of Maths literacy in the Sector through the development of Maths learning material, which will shortly be tested in a pilot project. INSETA will also implement a Maths Upliftment Project in the Sector later this year that will formally see the start of the improvement of Maths literacy across various levels of employment.

Other INSETA projects and initiatives aimed at the achievement of the above NSDS Objective are:

Development of Outcomes Based Education (OBE) Learning Material for all Unit Standards, including Maths for Levels 1-4. This material will be made freely available to anybody (employers, learning providers).
Contributed R50 000 to the Human Resources Standards Generating Body (HR SGB) for the development of Human Resources Unit Standards, which are now registered by SAQA

Training trainers how to develop OBE learning material for their own organisations and how to use OBE-based concepts, and to train according to them.

All learning providers are assisted in setting-up Quality Management Systems

Extensive marketing campaign aimed at creating awareness of the whole quality assurance concept in South Africa amongst all relevant industry stakeholders

Developing a full set of assessment instruments for Insurance Unit Standards

Cross-sectoral training, e.g. IT, HR Management, Sales and will also enter into Memoranda of Understanding with other SETAs/ETQAs to manage quality across sectors

INSETA also significant input to the development of Unit Standards in other Standards Generating Bodies, e.g. Ethics, Trustees, Communications, Maths Literacy and Financial Literacy.

INSETA Learning Strategy
Background

As a result of consultation with various employers, trade associations, professional bodies and private individuals in the industry, and the experience of INSETA during the past three years, INSETA developed a holistic and comprehensive Sector Learning Strategy to lead and direct training, development and learning within the Insurance Sector. The strategy is also aligned to our Sector Skills Plan (SSP) and the National Skills Development Strategy (NSDS) of Government.

The strategy is implemented through a range of industry-customized programmes at all levels of employment identified and initiated by INSETA.

The main advantage of a comprehensive, integrated and structured learning programme framework as indicated above, is the provision of standardized and customized theoretical and vocational training by quality training service providers to the benefit of both employers and employees in the sector, especially beneficiaries from designated groups in order to accelerate employment equity aims in the Sector. These different programmes also compliment any training that is already done by employers in the sector and presents a further option available to employers, especially SMMEs.

Vision of the Learning Strategy

INSETA envisages a partnership with the employers and other stakeholders in the Insurance Sector, and education and training institutions to accelerate the development of new entrants and existing employees, especially at management and supervisory level to meet the challenges of the new world of work in the South African political, economic and social environment, through the implementation of an integrated and structured learning strategy, with specific emphasis on developing people from designated groups.

Objectives of the Learning Strategy

Providing the employers (especially SMMEs) and employees with world-class, affordable, high quality, national and international recognized sector customized training/learning programmes relevant and beneficial to all Sub-Sectors

Establishment of a culture of life-long learning in the sector through a top-to-bottom and a bottom-up approach at all levels of employment, making training/learning a strategic imperative for employers and employees - truly a "Classroom to Boardroom" approach.

Closing of current and future skills gaps/needs in the sector

Addressing the business issues of the sector as identified in the Sector Skills Plan, and the strategic alignment of skills development with sector priorities

Both theoretical and (mainly) vocational training

Integration of INSETA core functions, namely skills development, quality assurance and Learnerships

Addressing the issue of employment equity in the sector, especially at management level, whilst integrating skills development and employment equity

Alignment of National Skills Development Strategy, INSETA Sector Skills Plan, Workplace Skills Plans and Discretionary Fund Stakeholder Projects

Contribute to the achievement of INSETA Sector Skills Plan targets

Contribute to Black Economic Empowerment in the Sector

Create awareness amongst the school-going and unemployed youth of insurance as a career option with a clear career path

Promote entrepreneurship and the resultant job creation, especially in the Intermediary Sub-Sector.

The various component programmes of the Learning Strategy is as follows:

INSETA LEARNING STRATEGY

The following Learning Strategy Programmes have been implemented or are about to be implemented:

Board Capacity Programme, aimed at Board Directors and Executive Managers – from May/June 2003

Executive Leadership Development Programme (ELDP), aimed at executives and emerging executives will commence from 24 March 2003

Leadership Advancement Programme (LAP), aimed at middle and junior managers has commenced from 24 February 2003

The ELDP and LAP Programmes are groundbreaking and innovative programmes implemented in partnership with the Graduate School of Business of the University of Cape Town. They represent a first in the history of management development programmes in South Africa, as this is the first time that customised programmes of this nature have been designed and developed for an entire economic sector. This has been achieved through a process of consultation between INSETA, UCT GSB and the Insurance Industry.

Taking into account that only 12, 5% of all management positions in the Industry is held by PDIs (as reported in the first Employment Equity Commission Report), the composition of both programmes’ delegate groups represents a major breakthrough for the Industry. The figures are as follows:

ELDP

RACE

GENDER



African
Coloured
Indian
White
Total (25)

Male

Female


7
1
1
9
18


4
0
1
2
7




LAP

RACE

GENDER



African
Coloured
Indian
White
Total (49)

Male

Female


15
6
3
7
31


6
6
2
4
18


INSPREP (Advanced) – a bridging programme for graduates has a target date for implementation during late 2003 or early 2004.

INSPREP (Basic) – a bridging course for school-leavers was implemented in Cape Town during 2002, with the Gauteng Programme to follow later in 2003.

Insurance Career Awareness Programme aimed at Grade 12 scholars also has a target date for implementation during late 2003 or early 2004.

Although the official target for workers to have at least NQF 1 Qualification by March 2005, is set at 70%
INSETA’s target (60%) for 2002/3 has been achieved. It should be noted that the average qualification in the sector is Matric and higher, with very few (±1 000 employees) at a lower level.

By March 2005, a minimum of 15 per cent of workers must have embarked on a structured learning programme, of which at least 50 per cent must have completed their programme satisfactorily.

The total number of workers benefiting through structured learning programmes in the Insurance Sector as reported in the Annual Training Reports (ATRs) stands at almost 65% (±62 000 out of an estimated total of 95 000 employees) and the successful completion rate of the training is being assessed through the careful assessment of the ATRs.

In addition to the structured workplace training as reported in the Workplace Skills Plans and Annual Training Reports of employers, special training programmes/projects are also taking place in the Sector and funded by INSETA from its available Discretionary Funds. These stakeholder projects are all aligned to INSETA’s Sector Skills Plan (SSP) and must address identified skills gaps/needs and/or business issues as identified in the SSP. It also had to comply with INSETA’s Discretionary Grant Policy and had to benefit the wider Insurance Industry. The vast majority of beneficiaries of these projects are Previously Disadvantaged Individuals (PDIs) In 2002/3 special attention was paid to SMME projects and 12 out of 16 approved projects were awarded to smaller employers in the industry this in addition to the significant number awarded in 2001/2.

INSETA had several aims/objectives in mind with the concept of stakeholder projects, amongst others were:

Creating awareness and marketing of INSETA, both amongst industry stakeholders and the wider South African society

Proving to industry and Government that levy funds were returned to the industry.

Addressing industry skills needs/gaps and business issues as identified in the Sector Skills Plan, such as HIV/Aids, life/career skills, Insurance technical and related knowledge, e-learning/IT-skills, entrepreneurial skills, Mathematics and Science upskilling, SMME upskilling, and management/leadership

Projects benefiting not only the individual employer, but also the wider industry or a specific sub-sector

The concept of stakeholder projects proved to be very popular amongst employers and service providers. A total of 106 project applications with a total value of R64m were received during the past two years – INSETA had ±R22m available and awarded the funds to 51 successful projects with a projected number of more than 680 000 beneficiaries! To date some 20 stakeholder projects have been completed to the value of R5, 351m with more than 48 000 beneficiaries at an average per capita cost of just R111, 16 per beneficiary! This is truly phenomenal statistics and clearly indicates the almost unlimited power and scope of the Discretionary Funds available to SETAs, provided that it is utilised in a responsible, properly controlled manner and that a SETA has the capacity to manage projects.

Please see Annexure 2 for a full list of INSETA sponsored stakeholder projects for the period 2001-3.

By March 2005, an average of 20 enterprises (to include small, medium and large enterprises) and at least five national government departments, must be committed to, or have achieved the Investors in People Standard (IiP).

INSETA’s target for the period 2002/3 was three large employers to be participating in Investors in People and that target was achieved with the participation of Old Mutual, Sanlam and Metropolitan as IiP-sites.

OBJECTIVE 2:
FOSTERING SKILLS DEVELOPMENT IN THE FORMAL ECONOMY FOR PRODUCTIVITY AND EMPLOYMENT GROWTH

INSETA’s payout ratio for 2000/1 (Y1) and 2001/2 (Y2) of Mandatory Grants (for the registration of a Skills Development Facilitator (SDF) and the submission of Workplace Skills Plans and Annual Training Reports) amounts to approximately 82% of available funds in this category. An amount of R72, 33m were returned to compliant employers during this period. The figure for Y3 is not yet available, as the final Grant payments will be instituted in August 2003. Trends so far indicate similar payout ratios. Any unclaimed Mandatory Grant funds are transferred to INSETA’s Discretionary Fund and committed/allocated to identified projects.

A number of 136 out of 2 696 Skills Development Levy-paying employers claimed back Grants in 2000/1 and 150 out of 2 991 in 2001/2. This represents 5% of SD Levy-paying employers, but in turn they contributed 82% of the total SD Levy income of INSETA. The projection for the current year (2002/3) is more or less the same. It is thus patently clear that the vast majority of employers not claiming back grants are SMMEs. INSETA has implemented an on-going campaign to persuade these non-claiming employers to participate in the activities of INSETA and to realise the benefits available to them – especially the access to Discretionary Grants.

By March 2005, at least 75 per cent of enterprises with more than 150 workers must be receiving skills development grants and the contributions towards productivity and employer and employee benefits are measured.

For the period 2001/2 (Y2) 91% of the total number of SD Levy-paying enterprises within the Insurance Sector employing more than 150 workers received Mandatory Grants. INSETA’s target for the period 2002/3 (Y3) is 80% - figure for Y3 is not yet available as the final Grant payments will be instituted in August 2003. Trends so far indicate similar payout ratios.

By March 2005, at least 40 per cent of enterprise employing between 50 and 150 workers must be receiving skills development grants and the contributions towards productivity and employer and employee benefits are measured.

For the period 2001/2 (Y2) 74% of the total number of SD Levy-paying enterprises within the Insurance Sector employing between 50-150 workers received Mandatory Grants. INSETA target for the period 2002/3 is 75% - - figure for Y3 is not yet available as the final Grant payments will be instituted in August 2003. Trends so far indicate similar payout ratios.

By March 2005, Learnerships are available in every sector.

The Insurance Sector does not have a history of pre-employment education and training like the sectors that had Industry Training Boards and apprenticeship systems in place. INSETA had to start the identification, design, development and implementation of Learnerships from scratch.

Achievements:

15 Learnerships across all sub-sectors have been registered by the Department of Labour. We are also identifying Learnerships at all levels on an on-going basis and new Learnerships are in the process of being designed and developed in consultation with our industry stakeholders

14 are brand new Unit Standard based Learnerships.

INSETA has requested SAQA to register our Financial Literacy Unit Standards, as a Fundamental in addition to the other SAQA required Fundamental Unit Standards.

The reasoning for this is that if our people are going to manage other people’s money then they need to be able to manage their own money first.

One is a Whole (existing) qualification based Learnership.

We have one at entry level into the Sector, which is at NQF level 2.

We have one at a NQF level 3, which is the natural learning pathway from NQF level 2.

The two Learnerships referred to above, will make it possible for school leavers to enter into a learning pathway in the Insurance Sector, which has been predominantly a matric (grade 12) plus Sector.

We have 12 Learnerships at NQF level 4. These Learnerships are specific to job roles in the Insurance Sector.

We have one Learnership at NQF level 5 that leads to an existing qualification.

The table below illustrates the various Learnerships that we are responsible for Quality Assuring:

LIST OF REGISTERED LEARNERSHIPS


Title of Learnership


Qualification it leads to


NQF Level


DoL Registration Number

Junior Administrator

National Certificate: Insurance Administration


2


13Q130001341602

Insurance Administrator

National Certificate: Insurance


3


13Q130002441603

Healthcare Benefits Administration Claims Assessor

National Certificate in Healthcare Benefits Administration: Claims Assessing


4


13Q130003431604

Unit Trust Investment

National Certificate in Unit Trust Investment


4


13Q130004401604

Retirement Fund Administrator

National Certificate: Long Term Insurance


4


13Q130014651204

Long Term Insurance/Investment Product Developer

National Certificate: Long Term Insurance


4


13Q130008681204

Long Term Insurance/Investment Call Centre Operator

National Certificate: Long Term Insurance


4


13Q130012681204

Long Term Insurance/Investment Administrator

National Certificate: Long Term Insurance


4


13Q130009681204

Long Term Underwriter

National Certificate in Insurance: Long Term: Risk Assessment


4


13Q130011451204

Long Term Claims Assessor

National Certificate in Insurance: Long Term: Risk Assessment


4


13Q130005501204

Short Term Insurance: Personal / Domestic Claims Negotiator

National Certificate: Short Term Insurance


4


13Q000016431204

Short Term Insurance: Personal / Domestic
Underwriter

National Certificate: Short Term Insurance


4


13Q000018431204

Short Term Insurance: Personal / Domestic
Call Centre Operator

National Certificate: Short Term Insurance


4


13Q000017421204

Short Term Insurance: Commercial / Industrial
Underwriter

National Certificate: Short Term Insurance


4


13Q000015421204

Group Retirement Benefit: Fund Administrator

Certificate: Insurance Studies


5


13Q130013002405


By March 2005, all government departments must assess and report on budgeted expenditure for skills development relevant to Public Service, Sector and Departmental priorities.

Not applicable to INSETA.

OBJECTIVE 3:
STIMULATING AND SUPPORTING SKILLS DEVELOPMENT IN SMALL BUSINESSES

By March 2005, at least 20 per cent of new and existing registered small businesses must to be supported in skills development initiatives and the impact of such support to be measured.

The challenge for INSETA was to understand the diversity of needs and demands of small businesses in the Insurance Sector, as well as the existing infrastructure to support small business in South Africa. As such INSETA initiated an SMME Support Project financed from its Discretionary Funds. The appointment of INSETA Regional Advisors in Gauteng, Western Cape and KwaZulu-Natal to assist, support and guide our small employers has contributed to the success of this particular initiative during the past year with a substantial increase in INSETA registered SMMEs.

INSETA also developed a holistic strategy for SMMEs in the Insurance Sector in consultation with various stakeholders in or servicing this particular Sub-Sector. The INSETA Executive Management Committee approved the SMME Strategy and as a result a new EXCO Sub-Committee, comprising of a number of SMME-members, has been established to advise INSETA on the implementation of the strategy.

INSETA is confident that this strategy will be able to improve quality, productivity and economic growth for SMME’s and these key deliverables will complement job creation in this particular sub-sector. INSETA aims to target at least 3000 SMMEs through this strategy during the period leading up to 31 March 2005.

Please also refer to paragraph 1.2 and Annexure 2 for SMME training projects funded by INSETA from Discretionary Funds during the period of 2001-3.

A major initiative aimed primarily at our SMMEs will be implemented later this year in the form of the INSETA FAIS Project. This is possibly the single biggest challenge facing the industry and opportunity for INSETA to implement the NQF and Skills Development in SMMEs, which are mainly in the Financial Intermediary Sub-Sector (Insurance Brokers and Financial Planners/Advisors).


OBJECTIVE 4:
PROMOTING SKILLS DEVELOPMENT FOR EMPLOYABILITY AND SUSTAINABLE LIVELIHOODS THROUGH SOCIAL DEVELOPMENT INITIATIVES

Please refer to paragraph 1.2 and Annexure 2 for social development initiatives/projects funded by INSETA from Discretionary Funds during the period 2001-3.

By March 2005, 100 per cent of the NSF apportionment is spent on viable development projects.

INSETA submitted a NSF Project Proposal to the Department of Labour (DoL) and is awaiting feedback in this regard.

4.2 By March 2005, the impact of the NSF will be measured by project type and duration, including details of placement rates, which shall be at least 70 per cent.

As above.

OBJECTIVE 5:
ASSISTING NEW ENTRANTS INTO EMPLOYMENT

Insurance Employment Preparedness Programme (INSPREP)
One of the most exiting projects implemented by INSETA during the past year in support of the above NSDS Objective was our Insurance Employment Preparedness Project (INSPREP) (Basic), which took place in Cape Town. INSPREP (Basic) is one of the INSETA Sector Learning Strategy Programmes – see pages 13-17.

Fifty matriculants from previously disadvantaged communities were provided with six-months full-time business and insurance training, as well as workplace exposure. Their training aimed to equip them for entry-level positions in the Insurance Industry, such call centre, customer care and administrative positions. After completion of the programme they were assisted to find employment in the Insurance Industry.

INSETA’s aim in funding the INSPREP Project was to make a difference in the lives of a few young people from disadvantaged backgrounds, and to assist their entry into the insurance world. It was also recognised that the Insurance Industry has a long way as far as greater representivity of its workforce and one way to address this is to provide new entrants into the workplace with the required skills and abilities. On the whole the Insurance Industry was very supportive of this initiative and participated fully in the project – from start to finish.

The content of the programme was divided into two phases, namely life skills (Phase 1) and insurance-related training (Phase 2). The major subjects covered were:

Maths Revision
Computer Literacy (Keyboard skills, operate a PC, basic Word processing, e-mail and Internet, etc)
Basic Business Fundamentals (SA political/socio-economic environment, stakeholder in business, Insurance and Labour legislation, etc.)
Career Life Skills (Financial literacy - personal budget, banking, credit, as well as job hunting, entrepreneurship, self awareness
Behavioural/EQ Skills (Teamwork, appreciation of diversity, problem –solving, HIV/Aids, time management, communication, etc.)
General Insurance Knowledge (Role of insurance, structure of the SA Insurance Industry and market, insurance records, etc.)
Customer Care (Business communication, telephone handling/customer queries, client interaction)
Call Centre Skills (Responding to customer needs, collecting customer information, providing information to customers)
Insurance and Investment Specific Knowledge (Life- and Short-term insurance, Unit Trusts, Healthcare, Retirement Funding, Funeral Insurance)

The profile of the selected 50 (out of a total of almost 200 applicants) was as follows:

African 42 and 8 Coloured of which 25 were male and 25 female
They were aged between 16 and 23 years old
The students came from areas like Kayelitsha, Langa, Bonteheuwel, Stellenbosch, Somerset West/Strand and Grabouw

100% of the students had no financial means of pursuing any further education or training, e.g. University, Technikon, and College.
20% of the students had prior access to computers through their school
24% of the students lived in a self-built or shack dwelling, and a further 24% lived in a Government sponsored house
80% of the students lived with one or both parents
68% of the students had more than three or more siblings at home
22% of the students had no employed adult in their household
The most typical occupations of the employed adults included domestic workers, outdoor workers e.g. gardening or construction, factory workers or support staff e.g. cleaning staff
64% of the students had access to books in their homes, of which 48% had less than 10 books in the home
38% of the students participated in voluntary community work

A student councillor was appointed for the duration of the programme to assist and support the students with both learning and private issues.

INSETA was extremely proud at the end of the programme when all 50 students graduated. That in itself is almost a miracle, but two months after the completion of the programme 31 out of the 50 were either full-time employed or on Learnerships. The latest figure stands at 36 – a glowing testimony to the overwhelming success of the programme!

INSPREP was a case study in action, with valuable learning for the Insurance Industry, INSETA and the learners. As such an INSPREP Research Report will be published in the near future.

It all starts with one small step – providing quality opportunities to those who have been previously marginalized, and who continue to be marginalized through their education and disadvantaged backgrounds, but have the necessary learning potential and right attitude towards learning – INSPREP showed the way!

By March 2005, a minimum of 80,000 people has entered Learnerships.

INSETA’s Sector Skills Plan research has shown that the Insurance Sector has shed approximately 10 000 jobs in the past two years, reducing the number of employees from 105 000 to 95 000. A number of factors are responsible for this trend, e.g. the maturity of the industry, mergers & acquisitions and retrenchments in the corporate sector, advanced technology, etc. INSETA has therefore embarked on a strategy to concentrate its efforts to market Learnerships as the perfect vehicle for the advancement of current employees from the Designated Groups. However, to date employers have used Learnerships predominantly for unemployed people – a tendency INSETA is thrilled about!

The data below reflects the number of learners for which Learnership grants have been approved to date:

Total Unemployed Learners

109

Total Employed Learners

46

Total Number of Learners

155


Further broken down by:

Employment Status and Disability

Unemployed Learners

106

Employed Learners

43

Unemployed Disabled Learners

3

Employed Disabled Learners

3


Race

African

86

Coloured

20

Indian

17

White

32


Gender

Male

69

Female

86


Race and Gender

African Male

41

African Female

45

Coloured Male

7

Coloured Female

13

Indian Male

8

Indian Female

9

White Male

13

White Female

19


INSETA’s budget for the implementation of Learnership for the period 2002/3 is
R6 000 000-00 and the Learners target for the corresponding period is 400. INSETA’s Learnership target for 2005 is 2 000 learners – mostly at NQF Level 4.

The following table illustrates INSETA’s Learnership Grant structure:

 


Type of Learner


Grant Description


Amount of Grant


1.


Currently employed learners


Lead Employer grant in respect of recovery of training costs


R12 000


2.


Currently employed, disabled learners


Lead Employer grant in respect of recovery of training costs


R25 000


3.


Unemployed learners


Learner Allowance as well as Lead Employer grant in respect of recovery of training costs


R20 000


4.


Unemployed, disabled learners


Learner Allowance as well as Lead Employer grant in respect of recovery of training costs


R40 000


The indicated Grants are not only for Insurance specific Learnerships, but also for Cross-sector Learnerships like Accounting, IT, Management, etc.

The above grants are in addition to the generous tax allowances made available by SARS.

Challenges:

Learnerships are a brand-new concept in the Insurance Sector and considerable marketing efforts have been made to educate stakeholders on the benefits of Learnerships – creating a national awareness of Learnerships is one of INSETA’s top priorities.

Increasing participation from SMMEs – it is heartening that the majority of employers participating so far in Learnerships are from the SMME environment.

Setting up of Learnership infrastructure that would be suitable for SMMEs

Having sufficient qualified assessors in the Sector, since most of our Learnerships are based on Unit Standard-based qualifications. To date INSETA has trained 650 assessors with an ultimate target of 1 000 before the end of this year.

Development of learning materials against brand new Unit Standards.

Increasing the existing levels of Learner competence against Learnership entry requirements.

Gaining the support and commitment of employers for Learnerships in spite of mergers and acquisitions.

Reduction in bureaucratic Learnership processes. In this regard INSETA has tried to simplify the process as much as possible within the regulatory framework.

By March 2005, a minimum of 50 per cent of those who have completed Learnerships are, within six months of completion, employed, in full-time study or further training or are in a social development programme.

Since the first Learnerships were only implemented five months ago it is too early to report achievements on this indicator.

3. CONCLUSION

Ladies and Gentlemen, this brings INSETA’s presentation to an end. There is so much more that I could tell you about the work at INSETA, but time has caught up with us.

From our presentation you can see that INSETA has fully embraced the challenge assigned to us during the short period of three years since our establishment. As a very young and small organisation, which was started from scratch we have many achievements that we are rightfully proud of, but we are under no illusion that a daunting task still awaits us.

Every one of us involved in the work of INSETA (Council members, INSETA personnel and service providers) regard ourselves as extremely privileged to be involved as pioneers in this national initiative to improve the lives of our workforce so that South Africa can proudly take up its rightful place amongst the best performing economies in the world. This task puts an awesome responsibility on our shoulders – a challenge that we have taken up without question, because we have a total belief in the end result of our collective efforts. We have learned and will learn as we continue on our journey, but we will strive to continuously improve our performance and service levels to all our stakeholders, to truly become their indispensable strategic partner and service agent in the delivery of skills development in the Insurance sector. This we will do at all times with unquestionable integrity!

I am looking forward engaging with the Committee on INSETA specific questions and issues.

I thank you.


GLOSSARY

ATR

Annual Training Report

CEO

Chief Executive Officer

D&T

Deloitte&Touche

DoE

Department of Education

DoL

Department of Labour

EE

Employment Equity

ELDP

INSETA Executive Leadership Development Programme

EXCO

INSETA Executive Management Committee

FAIS

Financial Advisors and Intermediaries Services Act

FS SGB

Financial Services Standards Generating Body

IiP

Investors in People

INSETA

Insurance Sector Education and Training Authority

INSPREP

Insurance Employment Preparedness Programme

INSQA

Insurance Sector Quality Authority

ITB

Industry Training Board

LAP

INSETA Leadership Advancement Programme

NLRD

National Learners Record Database

NSDS

National Skills Development Strategy

NSF

National Skills Fund

NQF

National Qualifications Framework

OBE

Outcomes Based Education

PDI

Previously Disadvantaged Individual

PwC

PricewaterhouseCoopers

RPL

Recognition of Prior Learning

SAQA

South African Qualifications Authority

SDL

Skills Development Levy

SMME

Small, Medium and Micro Enterprise

SSP

Sector Skills Plan

UCT GSB

University of Cape Town Graduate School of Business

WSP

Workplace Skills Plan