Efforts are continuing in the local insurance sector to increase the Emiratisation rate that currently stands at less than 15%.
Executives of insurance companies surveyed by Al Bayan that the Emiratisation rate in the sector is still below the desired level for several main reasons. These include less attractive remuneration offered in the insurance sector compared to the government sector; lack of competence and lack of experience among locals.
The executives called for measures to push up Emiratisation rates, especially a review of salaries and the provision of training to prepare young citizens for the technical, financial, legal and administrative aspects of the insurance sector.
According to official statistics, the total number of employees of insurance companies of various nationalities was about 9,640 employees at the end of last year. Of this, the number of nationals was 1,316 citizens, or 13.6%. In technical departments of insurance companies, there were a total of 5,650 employees of all nationalities at the end of 2018, of whom 702 were nationals, constituting 12.4%.
The challenges faced in trying to raise the localisation rate in the insurance sector include:
1. Ambitious development projects by insurers fuel the hire of foreign expertise
2. Intense market competition has led to recruiting skills without regard to nationality
3. Rapid digital transformation has not been matched by adequate preparation of locals for quality jobs
4. There exists ignorance among locals of the advantages of employment in the insurance sector. Local graduates enter the job market without clear guidance on where career opportunities lie
5. Remuneration levels in the government sector are more attractive than in the private sector
6. Poor communication between universities and financial institutions fails to indicate needs in the manpower market
7. Risk management, regulatory compliance and IT functions need special qualifications.
8. Misconception among new graduates that a senior great position awaits them upon graduation.
Mr Fareed Lutfi, secretary general of the Emirates Insurance Association, said that raising the localisation rate in the insurance sector requires the combined efforts of all stakeholders, including the Insurance Authority and insurance companies.
In January last year, the UAE government launched a points system to promote Emiratisation in the insurance industry. The scheme assigns point targets to institutions based on their revenues. Insurance companies with bigger gross written premiums have higher Emiratisation targets to meet. They also gain points for investing in the training of UAE nationals and developing their skill sets. This is to help locals move up the career ladder to senior management roles in the insurance sector.
The system grants more weight to more important positions in an insurance company. For example, an insurer scores five points if it creates a managerial position for a UAE national, whereas a non-managerial post fetches one point. In addition, if an insurer fails to achieve a stipulated Emiratisation target, a financial penalty will be levied.