GF
Gulf is itching for insurers
13 November 2007
Insurance is booming in the Gulf, particularly in Dubai and Saudi Arabia. And without enough qualified staff to go around, poaching and salary inflation are rife.
Magib Bahous, group vice-president at Saudi insurance firm Arab Commercial Enterprise, says: “We’re in a situation where everybody needs qualified staff in order take hold of new business opportunities available and there isn’t enough supply in the market. There is a war for talent and firms are offering multiples of salaries to attract people.”
The new liberalised Saudi insurance laws have prompted suggestions that business in the region could climb from the current annual worth of US$1.5bn to US$8bn in 10 years’ time. Firms must now obtain a licence to operate in the country; so far 18 are signed up, with a further 24 in the pipeline.
Meanwhile, the proliferation of new insurance firms in Dubai prompted Richard Ward of UK underwriters Lloyds to tell the Daily Telegraph recently that the emirate could soon rival London.
Omar Wehbe, managing director of Dubai insurer Wehbe Insurance Services, believes the region will still rely heavily on qualified expat workers, something that goes against the push for emiratisation: “I think emiratisation needs to be managed properly and they need to base it on qualifications rather than blindly employing locals, which currently limits the number of employees firms can take on.”
Saudi is also looking to up localisation. Figures from the Saudi Insurance Market Survey suggest that 43% of the current insurance workforce are locals, but that they account for only 27% of employees in senior positions.
HSBC has just teamed up with SABB Insurance Services to gain a presence in the kingdom, combining local services and access to HSBC’s international network. It promises in-house training and greater recruitment of locals.
Bahous says: “Expats will still be required in Saudi because of the rapid expansion, but there will be a gradual move towards locals. Any qualified, experienced Saudis will be snapped up.”
Although we have seen a number of insurance IPOs in the gulf lately, still, the market is considered very tiny. With increased awareness for insurance there will be some demand however comparing Dubai with London is unfair. The mere existence of Lloyds and offices of Allianz in London makes it an obvious insurance hub. With huge deals announced by gulf-based Airlines in the Dubai Airshow this week we will see big insurers rushing to make some deals.
Anonymous 14 Nov 2007
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