A recent report published by Zurich Global Life, Middle East & Africa (hereinafter referred to as ''Zurich'') ‘Exploring the end-of-service benefit dilemma’, highlights the challenges associated with End of Service Benefit (EOSB) payments that are made to expatriate workers when they leave an employer. It is estimated that the average EOSB payment has risen by 140% over the last six years. This is because the typical length of service has increased - from just less than 5 years to nearly 7 years - and the associated rate of salary growth over that period.


Zurich's research found that the majority of employers do not set aside specific assets to cover their EOSB liabilities and rather settle on a pay-as-you-go basis. Peter Cox, Head of International Pension Plans at Zurich in the Middle East comments: "The EOSB dilemma is an inconvenient truth. Although 83% of companies don't fund their EOSB liabilities, 85% think it would be a good idea if they did. This is a surprising response, bearing in mind it should be within their control to do so. Companies in the Middle East struggle to see the prudence of de-risking an ever growing financial issue".

The research was based on a survey of Chief Financial Officers (CFO's) and formed the basis of a Thought Leadership round-table discussion, organized by the consultancy firm Insight Discovery. The company first highlighted the limitations of the EOSB system in 2012. The report includes a case study by EY chartered accountants.

Surprisingly, some 72% of companies do not expect that the government will take steps to introduce a mandatory funding requirement. This is in spite of the fact that the sums of money are significant. In previous reports on the subject, Willis Towers Watson, an international consulting group, estimated that the aggregate liabilities across the GCC could rise to USD 75 billion by 2020.

The Department of Economic Development in the UAE welcomed the report which promotes discussions between government and stakeholders.

Peter Cox further added: "Expatriate workers across the region have a real need for attractive workplace savings solutions, which could include the EOSB entitlement. Those employers who facilitate workplace savings will find that they become an employer of choice with significantly improved recruitment and retention results. Such plans will also help CFO's who are looking to introduce a funding program to address increasing EOSB liabilities".

“Zurich continually monitors market developments and trends, such as EOSB, to tailor its products and services to support our customers. We welcome a review of EOSB by the government and have already developed market leading products in this area” says Jawed Barna, CEO of Zurich's insurance business in Middle East & Africa. He further adds “We are proud to be a Thought Leader in these important areas and this region remains a key focus for our entire savings, investment and protection solutions for our retail and corporate customers”.


Zurich International Life Limited is fully authorised under the Isle of Man Insurance Act 2008 and is regulated by the Isle of Man Financial Services Authority, which ensures that the company has sound and professional management and that provision has been made to protect plan holders. Zurich International Life Limited is a part of Zurich Insurance Group.

Zurich International Life Limited is registered (Registration No. 63) under UAE Federal Law Number 6 of 2007, and its activities in the UAE are governed by such law.*

Zurich Insurance Group (Zurich) is a leading multi-line insurer that serves its customers in global and local markets. With more than 55,000 employees, it provides a wide range of general insurance and life insurance products and services. Zurich’s customers include individuals, small businesses, and mid-sized and large companies, including multinational corporations, in more than 170 countries. The Group is headquartered in Zurich, Switzerland, where it was founded in 1872. The holding company, Zurich Insurance Group Ltd (ZURN), is listed on the SIX Swiss Exchange and has a level I American Depositary Receipt (ZURVY) program, which is traded over-the-counter on OTCQX.


Source: Insight Discovery