The temptation to say ‘enough is enough’ about the pandemic must be very hard to resist as corporates struggle to get back to business as usual. Unfortunately the thin dividing line between ‘courageous’ and ‘reckless’ has not yet been drawn.
But there were recent signs that two Middle Eastern nations might be some of the boldest players when it comes to making 2021 the year of real recovery – and that can only offer hope to the insurance sector that underwriting business may once again pick up momentum.
The first sign was when Dubai hosted glam hard rock band KISS at the Atlantis Hotel for a New Year’s Eve Livestream event. For a world that has been virtually starved of any form of live entertainment for most of the year, this was a bold and unprecedented event.
Covering the risks of the event from an insurance perspective must have been a blessing to those involved. The band, well known as workaholics, had not played live for 296 days prior.
And the risks covered may have been far more than the standard since, as KISS member Paul Stanley told Variety magazine, “This show that we’re doing is everything we’ve done on steroids,” he said. “We have, I think at last count, $1.5m of pyro.” He was referring to a spectacular fireworks display that served as a backdrop to the event – as well as a herald of the New Year.
According to the event organiser a budget of $750,000 was allocated to ‘safety measures’ but it is not clear how much, if any, of this was attributed to insurance premiums. The early signs are that Dubai’s early forays into ‘business-as-usual’ may come at a price as recent reports indicate that COVID-19 cases have surged in Dubai as January wore on.
The second sign of resilience is Saudi Arabia’s renewed efforts to convince the leaders of the world’s biggest businesses to relocate their regional headquarters to the kingdom. Reported to be named ‘Programme HQ’, the idea is to convince big corporates to use Riyadh as their regional hub.
Financial services entities – including insurers and reinsurers – will be the target of Programme HQ with early overtures continuing during the annual investor conference affiliated with KSA’s sovereign wealth fund, the Public Investment Fund that began on 27 January.
The endgame is to diversify the Saudi economy away from hydrocarbons and into ‘value added’ areas such as financial services. This is according to the blueprint outlined in Crown Prince Mohammed bin Salman’s ‘Vision 2030’ plan for the economy.
Drawing regional insurance and reinsurance CEOs to the King Abdullah Financial District will require more than just tax breaks, of course, and the right ecosystem, infrastructure and environment will be needed.
Reports suggest that the incentives being used to attract financial services companies to the district include tax exemption for 50 years and no requirement to hire Saudi nationals as well as guarantees of insulation against future regulatory changes. Early reports suggest that 24 multinationals have already signed up to relocate their regional HQs to Riyadh.
It is clear that some GCC nations are not waiting around for the end of the pandemic before they kick-start business.
Paul McNamara
Editorial director
Middle East Insurance Review