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UAE: Health insurance market needs consolidation, says DHA official

Source: Middle East Insurance Review | Apr 2019

The UAE’s health insurance sector is overcrowded with too many players fighting for very small shares of the market, a Dubai Health Authority (DHA) official has said.
 
“We have players unfortunately with 0.01% market share in the market still, and there are a couple with lower market share than that. This, in our view, hopefully will lead to some consolidation, specialisation or some players leaving the market,” said Mr Ali Fareed Lutfi, DHA’s head of payer regulation, at a recent conference, according to a report in Zawya. 
 
The DHA has licensed 50 of the UAE’s 62 insurers, 23 of the 25 TPAs licenced by the UAE Insurance Authority, and 103 out of 201 of the brokers or intermediaries operating in the market.
 
Of the participating insurers (PIs) providing health cover, Mr Lutfi said that one major player (Daman Healthcare) dominated. He said the cluster of smaller insurers at the bottom end of the market is “kind-of a critical zone for us”.
 
He added that health insurance was viewed previously as a lucrative sector, especially immediately following the introduction of mandatory health insurance two years ago. This is no longer the case, as more employees become aware of the cover and begin to submit claims.
 
“Utilisation has picked up,” Mr Lutfi said. “The margins aren’t what they were a few years ago.”
 
Margins in the health insurance sector are expected to deteriorate as “policyholders become more aware of their cover and the claims-making process”, said A.M. Best in its outlook for the UAE’s insurance sector published in late February. 
 
The rating agency added that there were “increasing indications” that although provision of mandatory health insurance is a necessity for securing employment visas, many employers were not renewing health insurance policies for the years in which visas are not due for renewal.
 
“The lack of continuous monitoring of employers regarding compliance with the DHA medical programme could create volatility in the level of premium volumes generated by insurers,” the agency said. M 
 
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