Abstract
The insurance industry in the Gulf Cooperation Council undergoes considerable changes. The UAE is one of the most successful regions where insurance brokers and agents achieve success and recognition. The representatives of GCC have survived the global economic crisis. Still, the organizations could not allow themselves to stay in the same position; therefore, they have to undergo certain transformations and consider the innovations to stay competitive and achieve the required portion of success. In this paper, the evaluation of the UAE insurance market will be offered and compared with the markets of other regions of GCC, such as Saudi Arabia and Qatar. In addition, the explanation of such terms as an insurance broker and an insurance agent will be given to clarify if these two occupations may coexist regarding their responsibilities and rights in terms of relations they can develop with clients.
Insurance Broker in the UAE
The Gulf Cooperation Council is a regional unit that consists of all Arab states, including the UAE, Saudi Arabia, Oman, Qatar, etc. During the last several years, this region has undergone a number of considerable changes, and the insurance industry is not an exception (GCC insurance industry, 2013). The UAE is one of the dominant states in GCC, and its insurance conditions remain to be the most successful. In 2014, the insurance market growth was about 15%, and the insurance premiums were more than $22 billion (Rizvi, 2015). The differences between years show that regional insurance companies are ready to work and develop their activities to result in considerable financial benefits and assets.
In comparison to the UAE, there are also such regions as Saudi Arabia (about $8 billion) and Qatar (about $2 billion) that demonstrate good results in the insurance market. The peculiar feature of insurance brokers in the GCC is their decision to capitalize on the practice to reduce the strengths of credits (Rizvi, 2015). To gain control over the assets that come from insurance companies, in the UAE, new broker regulations were offered in 2012 according to which brokers could identify their possibilities and conduct life assurance, insurance that is related to fund business, general assurance, etc. (O’Shea, 2014).
These regulations help to understand the difference that exists between an insurance broker and agent. Though both occupations deal with sales of insurance policies, these people should take different responsibilities. A broker is a person who cannot carry on business the way an agent can. Agents can represent one company only, and brokers may represent several companies at the same time and provide clients with a number of products. Agents usually work for a company, and brokers take care of customers. In the UAE, a broker cannot become an agent or develop business relations with another broker.
The task of the broker is to consider the interests of a client only. Brokers are able to undertake reinsurance broking. However, the same broker cannot perform the functions of an insurance broker and a reinsurance broker in regards to the same transaction and customer (O’Shea, 2014). Agents are free to choose the conditions under which they want to work and inform their clients about their intentions. In comparison to brokers, agents have such rights. Still, there is one requirement that has to be met by both occupations: either a broker or an agent has to get the required license that corresponds with the jurisdiction of the region where a person starts working.
References
GCC insurance industry. (2013). Web.
O’Shea, J. (2014). New UAE broker regulations become law. Clyde & Co. Web.
Rizvi, M. (2015). UAE insurance industry to sustain dominance in GCC. Khaleej Times. Web.