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Feb 2017

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MEDGULF to make big impact in the UAE

Source: Middle East Insurance Review | Jan 2017

Mediterranean & Gulf Insurance & Reinsurance Company (MEDGULF) recently entered the UAE market as a medical player but aims to be an all-line insurer within the next three years, says Mr Shadi Al Mahameed, General Manager, MEDGULF UAE.
By Osama Noor
 
 
MEDGULF UAE started business last October and early signs have been promising, especially with the company attracting several SME and large accounts in the first few months of operations, according to its General Manager. 
 
   “It is a very encouraging outcome in this early start-up period,” said Mr Al Mahameed who joined the Saudi-headquartered company from Marsh UAE, having had more than 20 years of insurance experience in the region with stints in Syria and Saudi Arabia where he originally started with MEDGULF KSA almost 20 years back.
 
   MEDGULF first received its licence as a medical insurer in the UAE in September 2015. The company has gained approval from the Dubai Health Authority (DHA), and is in the final stages of being approved by the Health Authority – Abu Dhabi (HAAD).
 
   However, being in the medical insurance business is just one step in the company’s plans to become a major provider in the UAE. Within the next couple of years, MEDGULF plans to obtain a licence to practice general insurance business, coupled with the possibility of taking over one of the existing players to be able to write life business. 
 
   “Ultimately we wish to become an all-line insurer of choice in the UAE. Limiting businesses to medical insurance is detrimental in the long run, especially with the market’s thin profit margins and high loss ratio.”
 
   Despite its impressive record of acquisitions in the region, MEDGULF decided on a clean start in the UAE by opting for the organic route to growth. 
 
   “The Group has been working hard to obtain a licence in the UAE for some time. A couple of acquisition opportunities were on the table, but we preferred to go from the ground up basically to avoid the risk of inheriting the reputation and heavy legacy of the acquired operation. In most cases, only troubled companies resort to selling their portfolios/licences,” said Mr Al Mahameed.
 
Writing medical strategically
The company entered the market during a very tough period, made more challenging with Dubai’s launch of  compulsory healthcare insurance scheme. “This puts a big responsibility on the shareholders and board of directors, especially since results in the medical insurance business have not been encouraging. However, we believe that we can add value to both the marketplace and clients as well,” said Mr Al Mahameed.
 
   After building the necessary portfolio, MEDGULF plans to attain the Participating Insurer (PI) status in Dubai. And at present, it has chosen not to focus on the Low-Salary-Band (LSB) employees – those who receive below AED4000 monthly salary. “Tapping into this field requires data, so we prefer to operate on the non-LSB tiers in Dubai and the northern emirates, and then Abu Dhabi after gaining HAAD’s approval,” he said.
 
   The company is fully equipped with the necessary human and technical capabilities to expand its medical portfolio, but the strategy is to write in a prudent manner, he said. “We are very selective and work in accordance with the underwriting guidelines the reinsurers set. We will not concentrate on the top line and abuse the relationship with our reinsurer, which should not be compromised for the sake of achieving swift profits.”
 
   He added that among his operation’s main accomplishments in this short period of preparations is to get a strong reinsurance treaty. “It is challenging to get a reinsurance treaty for a start-up operation especially one underwriting just medical insurance.”
 
A broker distribution strategy
MEDGULF is distributing its products through brokers and it is proving to be rewarding, said Mr Al Mahameed. 
 
   “We have been well-received by the brokerage community in the UAE. In less than four months of operations, we were able to build a strong network with some of the country’s well-known reliable brokers and business from this channel is growing steadily. Insurance brokers will be our only channel of distribution in UAE and we do not plan to have a direct sales force.”
 
   Despite having its own regional TPA – MediVisa and  Prime Health Co – MEDGULF sees it prudent to work with other local TPAs in the UAE. 
 
   “It might take couple of years to build an in-house claims handling department and activate our own TPA.”
 
Looking for a stronger foothold 
A pioneering insurance group, MEDGULF enjoys more than 30 years of experience in major markets, including Saudi Arabia where it serves more than 1.7 million health insured members. 
 
   “We look to become a market differentiator in the UAE. The company is equipped with the necessary technical know-how backed by a strong regional group presence in Saudi Arabia, Bahrain, Egypt, Jordan, Qatar and Lebanon. The UAE is the hub for multinationals, and we look to become a major provider and make a difference in the insurance sector,” said Mr Al Mahameed.
 
 
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