Dubai’s Economic Recovery Reflected in the Health Insurance Industry
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Dubai’s Economic Recovery Reflected in the Health Insurance Industry

Dubai’s Economic Recovery Reflected in the Health Insurance Industry



Dubai’s economy has shown signs of recovery from the Global Financial Crisis of 2008. Certain sectors seem to reflect the recovery process, such as the property sector which has reported rising rents and sale prices. Additionally, a sector which shows signs of economic growth is the medical insurance industry, where international brands seem to be developing a stronghold in the region. Locally and internationally there are providers in the UAE to cater to each type of local or expatriate from minimum to full coverage.

In Abu Dhabi, it is mandatory that each expatriate acquire personal medical insurance. There are notions for the same law to be put into effect for Dubai and rolled out to the other Emirates. This mandate could pressure the medical insurance industry into providing similar coverage to locals and expatriates alike. At the moment, there is a large gap in coverage when choosing between local and international providers. Even so, the interest in international coverage seems to be picking up speed across the Middle East and North Africa region (MENA).

Tim Slee, director of global sales at Bupa International, stated that there has been an ‘exciting new level of increased activity across the Middle East,’ in terms of interest in international medical insurance. This increased interest has led to a strong conversion rate of international medical insurance sales in the UAE, Mr. Slee noted.

Bupa International has opened up its policies to include full medical underwriting for individuals. This was formerly not available in the UAE and opens doors for many new customers. Previously, it would have been extraordinarily difficult for the average customer with a pre-existing condition to change insurance providers. Full medical underwriting provides potential international customers to add on their pre-existing conditions with the option of a different premium.

Allianz Worldwide Care, an international name brand in insurance, stated “Growth has been across the entire Middle East region. As a result of increased opportunity in Qatar, we have opened up a branch office there. All other countries have seen a healthy growth in membership (with the exception of Bahrain).” The international market is flooding with new enquiries from personal to corporate. Corporations are steadying themselves for the possible legislative reform. Allianz says, “These companies would have previously been covered with alternative insurers but chose to move for specific reasons such as low customer service standards.”

A third international insurance distributor, with business and offices located in Dubai has experienced the same trend in increased activity over the last 12 months. The insurance distributor which provides international medical insurance to UAE based expatriates, saw enquiries about their coverage and plans increase by almost 35 percent since 2011. Sales have increased 48 percent in 2012 from 2011 and the year has yet to finish.

Local UAE insurer, Green Crescent Insurance, reported losses of US $3.73 million since the start of 2012. GCI has been known as one of the top five local insurers in the Emirates. As GCI has been providing premiums below market rates and has also reported losses for the past 3 years, in 2011 providing a 50 percent loss in market value. Although using competitive pricing may seem a winning strategy for providers, clearly with local insurance it doesn’t work as premium prices rise with the cost of medical treatment.

UAE medical insurance analysts are forecasting a change in the local market conditions in the wake of the announcement from Green Crescent. With positive growth in the international sector, analysts are strongly suggesting that a number of systemic changes may be rolled out, which could potentially see local providers start to offer products more in line with those which are currently on offer through larger international organizations, such as BUPA. Simple benefit additions, such as short-term travel protection, could provide stronger incentives for the resident expatriates who favour globally accepted packages.

Amongst the local insurance market in Dubai, there remains a concern about the degradation of premium prices in attempt to recover market share from the international corporations. As simple premium reductions could negatively impact the company’s loss ratio, a suggestion might be to use equitable pricing alongside high quality coverage. To capitalize on the growing numbers of foreign nationals moving to the UAE, companies must find a comparable balance to premiums and coverage.

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