The FIA recently represented our members at a meeting of the multi-sector Public and Private Growth Initiative (PPGI) in Johannesburg. The PPGI is a joint initiative between the Department of Planning, Monitoring and Evaluation and various industries within the private sector. It has been tasked by President Ramaphosa to identify potential synergies between Government’s growth plans and those of the private sector, as well as any inhibitors that may need to be overcome.
By participating in the PPGI, the FIA is contributing towards stronger relations between business and government while raising awareness of the important role that intermediaries play in the financial services sector. We are also highlighting the impact that increasing regulation is having on our sector, i.e. increased costs for existing businesses and barriers to entry for new players.
The PPGI meeting brought leaders from 12 sectors together to identify growth inhibitors and opportunities for development for the next five years in the context of the National Development Plan. The FIA presented a number of insights into trends, policy changes, success inhibitors, etc. and shared our five key focus areas, namely:
- Enterprise and supplier development programme for intermediaries
- Skills development programmes for intermediaries
- Manage ongoing regulatory and policy change
- A Centre of Intelligence – developing a data hub for the insurance industry
- Consumer education – empowering consumers to better understand their financial needs and risks
Across the board, the leaders at the meeting indicated that an increase of approximately 5% to GDP should be achievable over the next five years, in partnership with Government. Individual projections varied between 3% and 5% subject to circumstances relevant to the specific sector. However, the projection of an overall 5% contribution to GDP is based on the expected multiplier impact on associated businesses that cannot accurately be quantified at this stage.
Leaders in each of the 12 sectors remain confident that South Africa has the ability to grow by these percentages and offer lucrative opportunities for both domestic and foreign investors.
In order to help achieve this growth, the intermediary market has committed to growing the number of independent intermediary businesses in the country. This will result in increased competition, which bodes well for consumers and market growth.
We also aim to ensure that broker intermediation remains a natural and quick entry point for upcoming entrepreneurs in the sector.
On the 29 January, the PPGI presented its consolidated report, including submission by the FIA to President Ramaphosa. We will publish an update on our participation in the PPGI in the next issue of FIA Insight, which is due for publication at the end of March.
In the meantime, if you would like any more information on this or any other topic, don’t hesitate to contact me.