GCC insurance facing shortage of skilled manpower

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Growing numbers of Islamic insurance (Takaful) companies and the entry of multinational insurers and brokers in the region's insurance sector has increased poaching for qualified staff, said an insurance expert.

Farid Lutfi, General Secretary of the Emirates Insurance Association, said while the phenomenon was common in many GCC countries, it was especially rampant in Saudi Arabia, Kuwait, Qatar and the UAE, where many new players are entering the market.

Despite the economic crisis that has hit the global financial sector hardest, and local insurance companies recording losses, the GCC's insurance sector is facing a serious shortage of trained manpower, he said.

Rival insurance companies and those from other financial services poach trained and experienced insurance professionals with better packages and benefits. The shortage is greater in the mushrooming number of Takaful insurance companies in the region. According Lutfi, retaining staff is a major problem for most insurance companies today.

Addressing insurance professionals attending Insurex 2009, Farid said: "This is a big issue in the insurance industry, especially in the GCC. The financial services sector across the board is looking at the same pool of talent, which is scarce. The high attrition rates are due to rapid economic growth and the industry's unpreparedness and market immaturity.

"The Middle East is witnessing incredible growth, which will remain in the double-digits for years to come in the region. The life insurance business is expected to grow at least 16 to 20 per cent annually until 2012."

He added that training and developing people is far better than the current practice of luring employees from competitors. "If we all begin to use the mindset of development and training, the insurance sector will benefit. Employees will not be easily lured away if they feel they have upward mobility and value within the organisation. Hardworking and proactive candidates should be groomed to rise to the top of companies," Lutfi said.

The Gulf Insurance Institute, a professional training institute started by leading insurance companies, is planning to start operations soon in the UAE. Reda Derbas, Associate Lecturer, Gulf Insurance Institute, told Emirates Business: "The Insurance Institute is a joint operation by the Bahrain National HoldingsBahrain National Holdings (Bahrain), Oman Insurance CompanyOman Insurance Company (Dubai), Al Ahiliea Insurance CompanyAl Ahiliea Insurance Company (Kuwait), Al Khaleej Insurance and Reinsurance CompanyAl Khaleej Insurance and Reinsurance Company (Qatar), Oman National Insurance Holding (Oman), Nasco Karaglan (France) and Shiekhan Insurance and Reinsurance Company (Sudan).

"The institute will run training programmes to develop human resources for the insurance and risk management industry. It provides different levels of training for insurance professionals."

Tariq M bin Ghaith, Secretary-General of Kuwait's Union of Insurance Companies, said : "Many new insurance companies, especially Takaful companies, have started in Kuwait. Out of 19 local insurance companies, 11 are Takaful and the rest are traditional insurance companies. Kuwaiti companies are active in many Gulf countries and they have acquired companies in the region. There is a possibility of mergers and takeovers in Kuwait or the GCC insurance sector and there is huge demand for manpower. In the 1970s Kuwaiti insurance companies had branches in the UAE. Now we don't have branches here. In Saudi Arabia, Kuwaiti companies have set up new companies as they could not open branches."

Alaa El Zoheiry, Managing Director, Arab Misr Insurance Group, said many Gulf-based companies are active in the Egyptian insurance market of 78 million people.

"The Egyptian insurance market is open for foreign investment and now there are 25 firms. By the end of 2009, we expect the number to be more than 30. Changes in the Egyptian health law will attract more foreign firms, especially from the Gulf," he said.

By VM Satish

© Emirates Business 24/7 2009