Does Gibraltar rock?

Gibraltar has been in the insurance press a lot recently with several UK-based insurers relocating to the British dependency. But to say there has been an accompanying 'boom' on the recruitment front would be an exaggeration.

The insurers that have chosen to move there have, on the whole, kept their administration and back-office functions in the UK, choosing to recruit a few people to man domicile offices in Gibraltar. According to one market commentator, the impact so far in recruitment terms is similar to a large insurer opening a claims office in Ipswich.

Joking aside, the fact that companies such as Markerstudy, Zenith, Saga, Euclidian and Admiral have decided to transfer business to Gibraltar has resulted in several new vacancies there. But this poses an interesting problem, given the population and geographical size of Gibraltar (see box) - particularly as the local government is confident of having 39 insurers, from 31 at the turn of the year, registered by the end of December.

Lack of staff

Indeed, Gibraltar's chief minister Peter Caruana QC recently conceded that the territory's development as a major financial services centre to rival Bermuda and Guernsey could be curtailed by a lack of staff (PM, 26 June, p3).

Mr Caruana told PM: "The main brake on our growth is not Spain (which has its own claim on the territory), but the unavailability of labour." To try and overcome this, the government offers incoming staff tax incentives and insurers that want to move to Gibraltar do not have to recruit a quota of locals, but can bring their own workforce with them. For those that do want to recruit indigenous Gibraltarians, the population is an educated one, with half of school leavers going on to higher education and many progressing to university in the UK.

Whether the island offers incumbents much scope for a career though is debatable. "In my experience, it is not somewhere people go to stay permanently, or see as a part of a long- term career move, because there is not the sufficient employment infrastructure there," says Chris Dickman, IPS director.

He notes that it might appeal for someone nearing retirement. But he believes those who have gone out there have, in the main, done so because of a job opportunity, rather than any plans to settle.

A long-term move

Dr John Mitchell of The Insurance Executive has placed a few people in Gibraltar over the past 18 months and claims all view the move as a long-term one. When head-hunting for senior people to move there, he says a target list of potential candidates needs to be at least twice as long as one for a UK role because it only appeals to certain types of people.

He adds that finding someone "who can be tempted away from a role where they are being well looked after is rarely easy, and finding an individual who is also happy to move abroad is much more time-consuming. But equally, it is more rewarding when it works out."

Despite these difficulties, Dr Mitchell says he has several candidates who are actively seeking roles in Gibraltar and as a result he is in the process of initiating a marketing campaign there.

Outside the traditional insurance market, there has been movement regarding the establishment of insurance managers and captives. Paul Cotter, head of the Dublin office of Joslin Rowe, says Gibraltar's captive market has moved on at a greater pace than those in Guernsey, the Cayman Islands, Bermuda and the Isle of Man.

Sourcing staff

Although specialising in recruitment for the Irish market and Channel Islands, he has been approached by two clients recently, looking at placing people in Gibraltar: "It's not a case of these companies moving from one place to another, they have simply identified Gibraltar as another possible location and asked us to source some staff for them."

Alain Dufraisse is someone who has recently moved to Gibraltar, having left Aon Insurance Managers in Dublin to head up the broker's protected cell company, Whiterock Gibraltar. Mr Dufraisse was attracted by the opportunity to run a PCC, which he claims is currently the only one in Gibraltar.

White Rock Insurance (Gibraltar) was formed on 1 February 2002 with initial paid up capital of EUR5m (£3.5m). The operation, which shares resources with Aon Insurance Managers on Gibraltar, currently has five staff and Mr Dufraisse is looking to boost that number to seven by the end of the year: "We have had quite a lot of interest from people in London. There have been local applicants too, but many don't have the background we are looking for because they tend to have worked in personal lines. That is not to say we would not recruit such people in the future, but for these jobs, candidates will ideally have experience of captive management."

Tax breaks

Regarding financial remuneration, Mr Mitchell says basic salaries are often set lower - or equivalent to - UK figures on the assumption that the tax breaks will compensate for the short-fall. "Many employers assume that the 'pull' of a life in the sunshine, out of the rat-race, is sufficient in itself. Often, the main incentive offered by potential employers is the move to a more relaxed lifestyle, where the 'work/life balance' enables hard work in a more laid back environment."

One part of moving to Gibraltar, which marks it out as less stressful for relocation than that of its rivals Guernsey and Jersey, is the housing situation. Mr Dickman says: "New recruits into jobs in either of the Channel Islands face difficulty buying property unless they have substantial free capital or were born there." But anybody thinking of setting up a base over Gibraltar's border in Spain should be warned that the border crossing can sometimes be a bit hit and miss, with one person comparing it to trying to cross the Thames with all the tunnels and bridges closed.

INSURANCE-RELATED COMPANIES REGISTERED IN GIBRALTAR

- 35 insurance companies licensed under the Insurance Companies Ordinance 1987 to carry on insurance business in Gibraltar

- 7 European Economic Area insurance companies entitled to carry out insurance business in Gibraltar

- 3 (all UK) Gibraltar insurers entitled to carry on insurance business in EEA states

- 26 Gibraltar insurers entitled to provide services in EEA states (all but three have a UK licence)

- 7 general insurance intermediaries

- 6 insurance managers

- 20 insurance intermediaries authorised to sell investment products

* information correct as at 3 November 2003

GIBRALTAR OVERVIEW

- Population: 29 481 (July 2000 estimate)

- Age structure: 0-14 years: 21% (male 3167, female 3013) 15-64 years: 65% (male 10 141, female 8925) 65 years and over: 14% (male 1769, female 2466) (2000 estimate)

- Population growth rate: 0.91% (2000 estimate.)

- Net migration rate: 3.39 migrant(s)/1000 population (2000 estimate)

- Nationality: noun - Gibraltarian(s); adjective - Gibraltar

- Ethnic groups: Italian, English, Maltese, Portuguese and Spanish

- Religions: Roman Catholic 76.9%, Church of England 6.9%, Muslim 6.9%, Jewish 2.3%, none or other 7% (1991)

- Languages: English (used in schools and for official purposes), Spanish, Italian, Portuguese and Russian.