The Gulf region's lucrative consulting market is set to rebound after it shrank for the first time in 2020 as Covid-19 forced companies to cut spending.
The market will grow by 17 per cent this year, led by Saudi Arabia, according to London's Source Global Research.
The Saudi consulting market was valued at $1.44 billion after contracting by 11 per cent in 2020. It is expected to grow by 19 per cent this year.
The $580m UAE market is set to expand by 15 per cent while other Gulf markets are expected to make similar gains.
More than six in 10 organisations in the region plan to increase their use of consultants in the next 18 months, with the energy, resources, technology, media, telecoms and manufacturing sectors showing strong interest.
As for their reasons, four in 10 said they face issues they lack the experience to handle while 39 per cent are under pressure to do their work more quickly and 38 per cent are short-staffed due to pandemic-related reasons.
Only 13 per cent said their need to use more consultants is due to digitisation.
However, when asked what areas they plan to invest in, three quarters of respondents cited new technology.
About 44 per cent of clients expect consultants to cut their fees while 13 per cent look forward to steep fee reductions, the report showed.
This is a stark change to attitudes before the pandemic, when 84 per cent of GCC clients said they expected consulting rates to rise.
When asked why they expect rates to fall, 55 per cent said they believe many companies are qualified to perform the work that needs to be done.
“Given the ongoing pandemic and its deleterious effect on the consulting market last year, one might well expect consulting fees to suffer over the next 18 months,” said Edward Haigh, joint managing director at Source Global Research.
A significant minority (38 per cent) of clients predict that fee rates will go up after the pandemic. Of those, more than a third said the need for expertise will drive demand.
The projected rebound comes after the market contracted by 12.4 per cent last year, wiping out about $400m in revenue, the report said. As a result, the market is now worth around $2.7bn.
“The GCC’s consulting market arguably relies on two things more than anything else – freedom of movement for consultants and reliably high oil prices,” said Mr Haigh.
“So, in a year when consultants were confined not only to their country of residence but even to their homes, and when oil prices were not so much volatile as downright absurd, you can imagine what that did to the nerves of the average consultant in the region.”
Health care and technology were the exceptions, growing by 19 per cent and 5.2 per cent, respectively, the report showed.
Much of the growth in healthcare consultancy services was centred on efforts to respond to the pandemic, although ongoing work to define the structure of the Saudi healthcare system had "an impressive momentum of its own", the report said.
The technology segment of the market grew last year as the need to quickly transition to remote working drove demand.
Cybersecurity services performed particularly well as companies sought to secure remote work, driving growth of 11.4 per cent last year.
Source Global Research expects the cybersecurity consulting market to grow by a further 30 per cent this year, taking total revenue to $236m.
While many consulting companies experienced a strong start last year as clients pressed forward with various transformation initiatives, the crisis hit the sector hard.
The pandemic forced nervous clients to put projects on hold, particularly in hard-hit industries such as retail, hospitality and aviation, the report said.
Key changes
Commission caps
For life insurance products with a savings component, Peter Hodgins of Clyde & Co said different caps apply to the saving and protection elements:
• For the saving component, a cap of 4.5 per cent of the annualised premium per year (which may not exceed 90 per cent of the annualised premium over the policy term).
• On the protection component, there is a cap of 10 per cent of the annualised premium per year (which may not exceed 160 per cent of the annualised premium over the policy term).
• Indemnity commission, the amount of commission that can be advanced to a product salesperson, can be 50 per cent of the annualised premium for the first year or 50 per cent of the total commissions on the policy calculated.
• The remaining commission after deduction of the indemnity commission is paid equally over the premium payment term.
• For pure protection products, which only offer a life insurance component, the maximum commission will be 10 per cent of the annualised premium multiplied by the length of the policy in years.
Disclosure
Customers must now be provided with a full illustration of the product they are buying to ensure they understand the potential returns on savings products as well as the effects of any charges. There is also a “free-look” period of 30 days, where insurers must provide a full refund if the buyer wishes to cancel the policy.
“The illustration should provide for at least two scenarios to illustrate the performance of the product,” said Mr Hodgins. “All illustrations are required to be signed by the customer.”
Another illustration must outline surrender charges to ensure they understand the costs of exiting a fixed-term product early.
Illustrations must also be kept updatedand insurers must provide information on the top five investment funds available annually, including at least five years' performance data.
“This may be segregated based on the risk appetite of the customer (in which case, the top five funds for each segment must be provided),” said Mr Hodgins.
Product providers must also disclose the ratio of protection benefit to savings benefits. If a protection benefit ratio is less than 10 per cent "the product must carry a warning stating that it has limited or no protection benefit" Mr Hodgins added.
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Rating: 2/5
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When: The one-off Test starts on Friday, May 11
What time: Each day’s play is scheduled to start at 2pm UAE time.
TV: The match will be broadcast on OSN Sports Cricket HD. Subscribers to the channel can also stream the action live on OSN Play.
Fight card
Bantamweight
Siyovush Gulmamadov (TJK) v Rey Nacionales (PHI)
Lightweight
Alexandru Chitoran (ROM) v Hussein Fakhir Abed (SYR)
Catch 74kg
Tohir Zhuraev (TJK) v Omar Hussein (JOR)
Strawweight (Female)
Weronika Zygmunt (POL) v Seo Ye-dam (KOR)
Featherweight
Kaan Ofli (TUR) v Walid Laidi (ALG)
Lightweight
Leandro Martins (BRA) v Abdulla Al Bousheiri (KUW)
Welterweight
Ahmad Labban (LEB) v Sofiane Benchohra (ALG)
Bantamweight
Jaures Dea (CAM) v Nawras Abzakh (JOR)
Lightweight
Mohammed Yahya (UAE) v Glen Ranillo (PHI)
Lightweight
Alan Omer (GER) v Aidan Aguilera (AUS)
Welterweight
Mounir Lazzez (TUN) Sasha Palatnikov (HKG)
Featherweight title bout
Romando Dy (PHI) v Lee Do-gyeom (KOR)
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Date started: March 2019
Founder: Dr Ali Al Hammadi
Based: Abu Dhabi
Sector: AgriTech
Initial investment: None to date
Partners/Incubators: UAE Space Agency/Krypto Labs
MATCH INFO
Manchester United 1 (Rashford 36')
Liverpool 1 (Lallana 84')
Man of the match: Marcus Rashford (Manchester United)
What are the main cyber security threats?
Cyber crime - This includes fraud, impersonation, scams and deepfake technology, tactics that are increasingly targeting infrastructure and exploiting human vulnerabilities.
Cyber terrorism - Social media platforms are used to spread radical ideologies, misinformation and disinformation, often with the aim of disrupting critical infrastructure such as power grids.
Cyber warfare - Shaped by geopolitical tension, hostile actors seek to infiltrate and compromise national infrastructure, using one country’s systems as a springboard to launch attacks on others.
MATCH INFO
Jersey 147 (20 overs)
UAE 112 (19.2 overs)
Jersey win by 35 runs
MATCH INFO
Final: England v South Africa, Saturday, 1pm
GROUPS AND FIXTURES
Group A
UAE, Italy, Japan, Spain
Group B
Egypt, Iran, Mexico, Russia
Tuesday
4.15pm: Italy v Japan
5.30pm: Spain v UAE
6.45pm: Egypt v Russia
8pm: Iran v Mexico
MATCH DETAILS
Chelsea 4
Jorginho (4 pen, 71 pen), Azpilicueta (63), James (74)
Ajax 4
Abraham (2 og), Promes (20). Kepa (35 og), van de Beek (55)
Results
5.30pm: Maiden Dh165,000 (Turf) 1,600m; Winner: Al Battar, Mickael Barzalona (jockey), Salem bin Ghadayer (trainer).
6.05pm: Maiden Dh165,000 (Dirt) 1,200m; Winner: Good Fighter, Richard Mullen, Satish Seemar.
6.40pm: Handicap Dh185,000 (T) 1,200m; Winner: Way Of Wisdom, Tadhg O’Shea, Satish Seemar.
7.15pm: Handicap Dh170,000 (D) 2,200m; Winner: Immortalised, Tadhg O’Shea, Satish Seemar.
7.50pm: Handicap Dh185,000 (T) 2,000m; Winner: Franz Kafka, James Doyle, Simon Crisford.
8.25pm: Handicap Dh185,000 (D) 1,200m; Winner: Mayadeen, Connor Beasley, Doug Watson.
9pm: Handicap Dh185,000 (T) 1,600m; Winner: Chiefdom, Mickael Barzalona, Salem bin Ghadayer
MATCH INFO
Manchester United v Brighton, Sunday, 6pm UAE
The biog
Born: Kuwait in 1986
Family: She is the youngest of seven siblings
Time in the UAE: 10 years
Hobbies: audiobooks and fitness: she works out every day, enjoying kickboxing and basketball
ATP WORLD No 1
2004 Roger Federer
2005 Roger Federer
2006 Roger Federer
2007 Roger Federer
2008 Rafael Nadal
2009 Roger Federer
2010 Rafael Nadal
2011 Novak Djokovic
2012 Novak Djokovic
2013 Rafael Nadal
2014 Novak Djokovic
2015 Novak Djokovic
2016 Andy Murray
2017 Rafael Nadal
2018 Novak Djokovic
2019 Rafael Nadal
MATCH INFO
Day 2 at Mount Maunganui
England 353
Stokes 91, Denly 74, Southee 4-88
New Zealand 144-4
Williamson 51, S Curran 2-28
