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Leading UAE insurance firms welcome tighter operating regulations
| Published: | 6 Mar at 6 PM |
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Following the recent announcement of stricter regulations and increased financial guarantees for the emirates’ insurance firms, international companies at the top of the sector’s tree have welcomed the changes.
The raft of new rules introduced by local regulators is expected to force all but half a dozen of the largest players out of this lucrative market place, as the vast majority of small companies do not have the financial backing to conform to the changes. Basically, trading at a profit will only be possible for leaders in the field, narrowing the personal choices of expat investors.
As reported recently, capital requirements for local firms will be raised by 66 per cent, with foreign firms forced to hold 80 per cent more than previously. Staff costs are expected to soar, as regulated companies will need a CEO, operations manager and independent auditor in addition to a managing director for each separate line of trading and seperate heads for each branch.
All staff at executive level must hold approved qualifications, and will not be allowed to deal directly with clients. As a result, overall running costs will soar, with only the largest firms able to bear the increase.
Established major UAE brokers state that standards in the sector will increase as a result of the new rules, but others feel that customers’ individual choice of broker and the personal services offered by reputable smaller firms will suffer as a result. Larger, some say, is not necessarily better, especially as regards establishing trust.
Sector leaders are expecting individual advisors to attempt to join larger firms, and are justifying their support of the measures by describing them as giving investors and savers opportunities to access new products and back-up support not previously available. Clients who have good reason to be happy with the personal services offered by trustworthy, individual advisors may not agree.
The raft of new rules introduced by local regulators is expected to force all but half a dozen of the largest players out of this lucrative market place, as the vast majority of small companies do not have the financial backing to conform to the changes. Basically, trading at a profit will only be possible for leaders in the field, narrowing the personal choices of expat investors.
As reported recently, capital requirements for local firms will be raised by 66 per cent, with foreign firms forced to hold 80 per cent more than previously. Staff costs are expected to soar, as regulated companies will need a CEO, operations manager and independent auditor in addition to a managing director for each separate line of trading and seperate heads for each branch.
All staff at executive level must hold approved qualifications, and will not be allowed to deal directly with clients. As a result, overall running costs will soar, with only the largest firms able to bear the increase.
Established major UAE brokers state that standards in the sector will increase as a result of the new rules, but others feel that customers’ individual choice of broker and the personal services offered by reputable smaller firms will suffer as a result. Larger, some say, is not necessarily better, especially as regards establishing trust.
Sector leaders are expecting individual advisors to attempt to join larger firms, and are justifying their support of the measures by describing them as giving investors and savers opportunities to access new products and back-up support not previously available. Clients who have good reason to be happy with the personal services offered by trustworthy, individual advisors may not agree.
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