More regulatory change is coming, though it is likely to be gradual and take a different form in the Gulf to that seen in Asia and the UK, top executives of four major life companies told a panel debate at International Adviser’s Gulf Expert Investor Forum.
“We will see some element of regulatory development over the next two or three years,” said Walter Jopp, head of market management, Middle East and Africa, for Zurich Life Insurance.
“We’ve seen what has happened in Hong Kong and what’s happened with the FAIR review in Singapore. There are elements of this happening elsewhere as the Isle of Man and other regulators are looking at an element of disclosure. We have to prepare ourselves,” he said.
Game changer
Theodor Alexandrescu, general manager for MetLife – Gulf, said change was not only likely in Dubai, home to all major life companies, but right across the Gulf region.
“The rules of the game will change, and this part of the world will embrace new practices soon,” he forecast. “We welcome all the changes and I think that we must be prepared to adapt.”
Alexandrescu said he believed regulation best practice from many other markets, including the regulation of the distribution, would ultimately reach the region.
“They are very welcome in order to create a level playing field for distribution and for transparency. In terms of the distribution, we see IFAs growing faster than other distribution lines,” he said.
Brendan Dolan, regional director Middle East & Africa for Old Mutual International, said he was a regular visitor to the offices of the UAE’s main life company regulator, the Insurance Authority, and felt there was a willingness to change and develop the current regulations.
“In a country where 85% of the population are expatriates, it is incredibly underserved. The problem with it being underserved and having a limited number of providers, is that there is less competition within that market,” he said.
“That will lead to less choice from clients and can lead to worse outcomes for the clients, if there’s not the competition there.”
However, when it came to what form the changes might take, Dolan was more cautious. “In terms of what is actually implemented, and how it is implemented, and the timescale, it is an ongoing challenge. Nonetheless, regulatory change is coming and it will change the market over the next two or three years,” he said.
