The third stage of Dubai’s compulsory healthcare scheme which will be implemented by the end of the year - obliging companies with fewer than 100 employees, and individuals, to purchase healthcare insurance – will require insurers to be attentive and ready to meet the rise in demand, according to Dr Haidar Al Yousuf, Director of Health Funding at the Dubai Health Authority (DHA).
Opening the Emirates Insurance Association’s (EIA’s) 2016 Healthcare Conference in Dubai recently, he encouraged insurers to roll out suitable and affordable offerings since the third stage of the scheme would largely cover individuals. He expects the size of the insured population in Dubai to reach 3.8 million by July, up from 2.6 million at the end of 2015.
To ensure compliance with the compulsory health insurance scheme, there will be a linkage with the visa issuance system of the immigration authorities. In addition, penalties will be imposed for violations of the scheme.
“Those two tools are to ensure that all the population is covered,” said Dr Al Yousuf.
He called upon insurers to work hard and innovate in order to sustain a high level of services. He said that expanding the target population opens windows of opportunities, yet it also poses challenges for insurance companies which need to handle the new business prudently.
Mr Saleh Al Hashimi, Vice Chairman of the EIA, said that increased awareness of health insurance, the ageing population and advances in medical technology are some factors which are leading to growth in the costs of healthcare.
Alongside complying with enhanced regulations and combating fraud to sustain an efficient healthcare insurance sector, insurers have to improve their management and adopt best practices, invest in research in health insurance modelling to set premiums on a scientific basis, and expand distribution channels including bancassurance and electronic avenues, he said.
Mart to consolidate
Ms Nabila Taha, Managing Director and Chief Actuary of Taha Actuaries & Consultants, urged providers not to look at health insurance as a complementary commodity but rather as a sophisticated line of business and area of focus which needs specialisation and dedication to attain positive results. Commenting on some market practices, including severe price undercutting, she said that as the IA is enforcing solvency requirements strictly, operators will be forced to consider M&A and the market will see a drop in the number of insurance companies in the next three to four years.
Mr Al Hashimi noted that insufficient investment returns are not helping to make up for the decline in insurance companies’ incomes, and that therefore consolidation would be a strong option in the coming period.
Health insurance in the UAE grew by 120% over the past five years reaching AED12.8 billion (US$3.5 billion) in 2015, accounting for 45% of the country’s general insurance premiums.
The two-day conference was organised by the EIA under the theme “Challenges and Opportunities under Health Regulations”.
AED1 = US$0.27