The opportunities that would emerge from this pandemic hinges on the transformation of the business towards digital.
Lower oil prices and COVID-19 containment measures across the GCC markets have resulted in a significant economic downturn, exacerbating the situation for insurers. As the pandemic evolves, so too are its impact on the global economy, said Allianz Partners MEA CEO & global head of TPA & MPM NEXtCARE Christian Gregorowicz. “Our region is one of the most affected because of the lower oil prices. This has a compounded impact on the industry. We have had to continue to operate and provide our clients with the necessary services while facing all these challenges,” he said.
Despite the unprecedented challenges, the health insurance sector has stood out for its agility in the adoption of digital solutions during the pandemic. Insurers and TPAs were quick to introduce and boost a range of telehealth and online services to ensure that customers did not need to step out of their homes to receive the medical attention they needed.
The opportunities that would emerge from this pandemic hinges on the transformation of the business towards digital, said Mr Gregorowicz. “Teleconsultation and digital access to healthcare are big opportunities. Today, a large percentage of consultations are taking place over the phone, and I believe this will continue for a while,” he said.
NEXtCARE embarked on its digital strategy three years ago to enhance consumer access to healthcare services, distinguishing it as a market leader in digital and telehealth services. The company has also gone fully digital when it comes to the payment of claims.
Going 100% digital
Mr Gregorowicz cited the shift to working from home as one of the toughest challenges brought on by the pandemic. He said, “We had to change the way we operate from being 100% in the office to 100% working from home, ensuring that our systems and processes were ready within a week or two to support work from home.
“We also had to cope with working from home while continuing to service our clients according to their expectations.”
He added, “We have seen an improvement in service levels to our clients and providers. As our employees are working from home, they are more productive since they don’t have to spend an hour commuting to and from the office.
“We have to push further into the digital world to continue serving our clients in a digital manner.”
The pandemic has led to a drop in healthcare utilisation, resulting in fewer claims, as people were observing social distancing measures and delaying or forgoing elective surgeries, said Mr Gregorowicz.
However, the sector has seen an increase in claims from COVID-19 as insurers in some markets are instructed to cover all insured patients diagnosed with the condition, even though a majority of medical policies across the markets contain explicit exclusions.
So far, the number of cases in Dubai, for example, has been manageable, and insurers are expected to be able to absorb these losses. However, if there is a material increase in the number of cases, the corresponding increase in claims will negatively impact the insurer’s profitability and offset the earlier decrease in claims volume, said Mr Gregorowicz.
Further, COVID-19 has caused many businesses to go bust or grapple with cash-flow issues. This could potentially cause insurers to face the issue of unpaid receivables or delayed payments, which will consequently impact their balance sheets, he said.
As the pandemic unfolds across the world, the insurance sector is under a lot of pressure from lawmakers who are calling for the sector to cover incidents not included in the policy. “The sector really needs to think about how to protect its business, its clients and its stakeholders when something like this happens, and how to put provisions in place for that,” Mr Gregorowicz said.
“Another observation from an operational perspective is how well the market has adapted to working from home. For those who were sceptical, the pandemic has proved that working from home works. So why not give our employees that flexibility and push them to continue working from home even after the pandemic?” M