Sep 2020

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More focus on technical underwriting

Source: Middle East Insurance Review | Aug 2020

After a period of price-based competition in the market, insurers must now understand the value of technical underwriting and avoid short-term gains, which would be damaging in the long run.
Hamad Al Mehyas, Acting CEO, Daman
How has COVID-19 affected Daman? 
Like everyone else, we have been impacted. However, at this time, it is too early to assess the full scale of the impact.
There have been positive experiences that came as a result, mainly the fact that we managed to operate fully on distance working and remote servicing of customers, with all services available for our 2.5m members who benefit from our UAE network of over 3,000 facilities – the largest in the country.
Looking at the challenges, new customer acquisitions are a concern because face-to-face interaction is an important factor when engaging corporate clients.
Another impact is that our medical claims as of now are lower than usual. Medical trends for all products are decreasing due to less utilisation as a result of curfews and related instructions. However, there is a high likelihood of a so-called rebound effect with much higher claims volumes and average cost per claim after the pandemic due to delays in diagnostics and treatments leading to more severe cases presenting in 2021.
Of course, our online and digital channels saw an increase as well – which showed that they are more important than ever before. This experience will certainly accelerate our plans to shift to a more comprehensive online business model that is equipped with fully smart and digital services. 
What are some of the lessons learnt from this crisis? 
The importance of online/digital channels for distribution/sales has shined through during this time, and so is the appreciation of its convenience by both customers and employees.
Telemedicine also increased during this time. As such, there is a possibility that it will be instated as a permanent equivalent to consultation and regular follow-ups, giving more choice to customers.
What is your advice for the sector to navigate this challenging period? 
Clients of our commercial products may expect lower prices next year due to the lower claims this year as a result of the curfew and distancing measures, but we need to be able to explain the reason behind expecting a rebound, and how this may be a ‘false positive’ result with the true outcome taking time to be evident.
After a period of price-based competition we have seen in the market, we hope that more insurers now understand the value of technical underwriting and avoid short-term gains which undoubtedly would be damaging in the long term.
We take pride in our track record of consistently applying internationally recognised underwriting principles in our policies which not only protects us, but also our customers who will not be concerned with our abilities of honouring claims and financial liabilities – and we value the trust they place in us. Our teams are all in-house and have the experience and knowledge necessary to apply sound underwriting measures.
How do you re-strategise as a CEO to lead your company in a post-pandemic world?
We are looking into continuing being a socially responsible company towards the health of the community we serve; finding opportunities in new products and services that would be relevant in a post-pandemic world, such as telemedicine and other digital innovation in health care; and building on the experience we have had with remote working such as digitalising more of our operations, as well as introducing new working models for our employees. M 
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