In many ways, the Middle East has become, and is becoming, one of the most exciting regions for economic and financial development.
Dubai is in position to not only have the world’s largest Ferris Wheel but also the world’s largest mall. In addition to large commercial attractions, Qatar will also be hosting the 2022 World Cup, another feather in the hat for the region that has seen marked instability during the last few years. However, one of the biggest indicators that show the region is in prime position for substantial growth can be found within the insurance industry, particularly in the health insurance sector.
It would be an understatement to say that the population of the United Arab Emirates has grown quickly. Census data shows that in the past 40 years, the population of the UAE has increased by 700 percent. Whereas just over 500,000 people resided in the UAE in 1975, today there are nearly eight million residents who call the Emirates home. A large percentage of these new residents are expats and foreign workers, and although many high caliber expats will receive health insurance through their jobs, low-wage, blue collar foreign workers often do not; especially in Dubai. Read more
Dubai roads were obscured with fog and heavy rain on the 17th of December 2012. The hazardous conditions affected drivers and caused as many as 330 motor accidents within a seven hour period.
The havoc caused by the traffic sparked predictions that the insurance industry could see premium rises in car coverage across the UAE at the start of the 2013 renewal season. Current average annual insurance rates for the UAE have been relatively low at 3 percent (0.5-1.5 percent less than other countries within the Gulf Cooperation Council) resulting in many motor portfolios from major insurance providers suffering massive losses, some reaching into millions of dirhams.Read the rest of the Premium Increases for UAE Drivers insurance article.
One of the signs that Dubai is continuing to show recovery after the 2008 Financial Crisis is through the growing health insurance industry. Many of the leading health insurance providers in the region are all reporting increasing numbers of insurance quotes and information requests from people interested in obtaining medical insurance.
Globalsurance continues to expand its services and operations in the region, attributing the influx to more and more inquiries from new clients and expatriates that are relocating to Dubai.
Tim Slee, Global Sales Director for Bupa International commented on this growth: “There is an exciting new level of increased activity across the Middle East, this increased interest has led to a strong conversion rate of international medical insurance sales in the UAE.” Bupa International has seen encouraging performances and maintains a strong presence in the region because of the diversified products they offer with their cooperation with Globalsurance.
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In this article we will first present our findings of the premium increases and premium inflation rates in each region and country we studied, with specific insurance findings to be presented at the end. Overall our findings were that International Private Medical Insurance (iPMI) premium inflation was very high, at roughly 10.8 percent per year over a 5 year average. While variations exist between countries, the reality is that iPMI inflation rates were extremely consistent throughout the world. However, it is important to note that this is medical insurance premium inflation at the high end of the sector, and not necessarily with regards to the mass market.
Even presenting the argument that premium increases are fairly consistent on a global basis, there are some immediate outliers – Hong Kong, for example, runs at an iPMI premium inflation rate of roughly 13 percent per year, while Kenya’s premium inflation rate is approximately 9 percent per year. Although there is a difference in premium inflation rates between Hong Kong and Kenya, the difference is not overly substantial – as will be seen inside this report.
Globalsurance is pleased to reveal the results of our latest study on the international health insurance industry and rates of international medical insurance inflation around the world as of August 1st 2012.
Using 7,916 data points from 8 different International Private Medical Insurance providers in 10 different countries, Globalsurance has been able to successfully identify a number of trends within Global Medical Inflation for individual International Private Medical Insurance (iPMI) plans during the time period from 2008 to 2012. iPMI is a subsector of the greater health insurance industry which services the global population of expatriates and international High Net-Worth individuals.
The companies sampled in the studies use Age and Geographical Area of Coverage as the main variables in their premium calculations. By selecting a sample which is community rated Globalsurance has been able to efficiently identify the actual rates for premium increases in different parts of the world. Our measure of inflation is based on a sample of policies, ages, and published rates for each insurer included in the study. Globalsurance selected the most common age groups and most common policy types for our data points to achieve realistic measurements in relation to medical insurance premium inflation around the world.
While individual insurance providers and underwriters may disagree with our findings, the figures represented in this report are based on our sample and present baseline figures for all of the regions and companies we chose to consider.
It is important to note that, unlike the recent Towers Watson Report on Medical Trends, the data contained in the Globalsurance insurance review is not survey based. Rather than looking at individual responses and feelings in reference to levels of health insurance premium inflation, which may have some inherent bias dependent on the respondent, Globalsurance is analyzing the actual premium data from insurance companies with exposure to the world at large, over locally based providers operating in a single country.
Additionally, we have analyzed premium data, and not healthcare pricing data. Consequently the figures represented in this report are indicative of the levels of healthcare cost inflation which insurance perceive to be in place in the locations we sampled; profit and operating costs of the individual insurers are assumed to be unchanged. While the increase or decrease in premium values may point to actual rates of medical inflation in the countries which were included in the study they do, in fact, represent the increased costs placed on policyholders.
However, it should be noted that, while the figures contained in this report are the actual rates of iPMI premium increases for the duration of the study, the removal of Age and Policy type means that the figures presented in this study of International Medical Insurance premium inflation can be used as a suitable proxy for rates of actual medical inflation in relation to healthcare costs around the world. It should be noted that the proxy does not represent medical inflation across the entire healthcare sector within a country or region; for example, NHS cost increases in the United Kingdom are not evident in our findings. The rates of iPMI premium inflation are only a proxy for healthcare costs in High-End, private medical facilities in the countries which we considered, due to the basic nature of the international medical insurance products we are studying.
So, without any further ado, here is the Globalsurance International Insurance Review:
There have been a number of notable changes in International Private Medical Health Insurance in the last few weeks, while not as earth shattering as the Libor scandal or the crop failures in the US, the progressive and continual changes reveal an industry that is currently very dynamic and competitive. While Bupa is launching products to fill gaps it sees in the IPMI market, US healthcare giant UnitedHealth Group is steadily working to increase the scope and quality of their international healthcare cover. Medicare International has been tuning their products to keep them competitive, and have made efforts to keep premium increases down to a minimum.
Bupa, one of the world’s largest insurers, has recently announced a new range of international private medical insurance products called Bupa Flex. Until now, international health insurance policies were only available for a minimum of one year, but Bupa Flex aims to provide the benefits of traditional long term international medical cover without the usual 12 month minimum duration. It is aimed at international travellers and expats who are planning to be abroad for a period of between 3 to 11 months. Now, people moving abroad for short term transfers can tailor the duration of their policy to their exact needs. It offers benefits above short term travel insurance because policyholders can increase the duration of their cover at any time, and even convert to long term health insurance without a loss of or break in cover.
An innovative aspect of Bupa Flex is that it is managed online. Bupa has created a secure online portal called Membersworld, through which subscribers can manage almost every aspect of their insurance cover. The portal allows clients to access their policy documentation, request pre-authorisation for planned treatments, submit claims and access live 24 hour webchat with experienced advisors. The service also uses email and SMS alerts to notify members of the status of their claims, or to alert them that there are documents online which require their attention.
Bupa Flex comes in two flavours; Bupa Flex and Bupa Flex Plus. The basic plan covers inpatient and day care treatment, local air and road ambulances costs, and outpatient surgical operations. Bupa Plus adds a full range of out-patient coverage as well. Because of the short term nature of the products, there are no options to add maternity, newborn care or cancer benefits. Both plans have a total limit of GBP1 million (USD 1.7 million) and do not offer cover in the United States.
NIB and Unitedhealthcare International Join Forces in Australia
NIB, Australia’s fifth largest health insurer, and UnitedHealthcare, based in Minnesota, have signed a strategic partnership whereby NIB will support UnitedHealthcare’s international health insurance members in Australia. The deal gives UnitedHealthcare International customers access to NIB’s network of healthcare providers in Australia, which includes more than 500 hospitals. It extends UnitedHealthcare’s customers direct settlement options at a wider range of healthcare facilities in Australia, like dentists and opticians.
UnitedHealthcare sells international expat medical insurance, under their Global Solutions brand, to employers with employees based internationally. “UnitedHealthcare International’s clients are benefiting from our expanding global health care network, providing their employees with seamless access to high quality health care. A growing number of our clients have operations in Australia, and they now will have access to top hospitals and care providers there,” said Simon Stevens, president of Global Health at the UnitedHealth Group.
The company recently set up a similar alliance with Dubai-based Al Sagr National Insurance Company, to expand their Global Solutions coverage to seven countries in the Middle East. Through this alliance, UnitedHealthcare members have access to local services in the Kingdom of Saudi Arabia, UAE, Jordan, Qatar, Oman, Bahrain, Lebanon and Kuwait.
NIB currently provide healthcare cover in Australia to about 20,000 international customers, and are aggressively working to position themselves for expansion into the international healthcare market. “We have a view that increasingly people will need global health insurance cover and that if we don’t have an involvement in this phenomenon we could be missing an enormous opportunity,” said Mark Fitzgibbon, CEO of NIB.
UnitedHealth Group serves 75 million people worldwide through its family of US and international health and well-being businesses and are the market leaders in supporting employers with international workforces.
While there is no reciprocal agreement in place for NIB customers in the USA, NIB may be hoping to expand their international healthcare coverage through partnerships of this kind.
Medicare improves international health cover
Medicare International has made a number of improvements to its international health insurance products.
Organ transplantation and HIV/AIDS benefits will now be included in their International and International Plus policies at no extra cost, with the transplantation benefit carrying a limit of USD 170,000 for the International, International Plus and Executive plans which rises to USD 340,000 with the Executive Plus plan. The HIV/AIDS benefit will be subject to a two year waiting period, and will have a lifetime limit of USD 17,000 across all plans.
Maternity and complicated or abnormal pregnancy cover available on the Executive and Executive Plus packages will no longer be subject to an excess of 20% and 30% respectively. and the 20% co-payment on newborn care has been scrapped. The reduction in out-of-pocket expenses may be a welcome change, as simplifying and streamlining the process at a stressful time may increase the perceived value to policyholders.
Claims are also no longer subject to a USD 5100 limit for group and individual claims, but claims are now fully recoverable and without any cap, subject to the policy limits of USD 1.7 million per annum.
Price rises for 2012 have also been well below the expected annual medical inflation rate of 12-14%, with an average increase of 8% for individual plans and just 5% for group policies. With the current state of the economy, it is a welcome change to see policies undergo significant improvement while still keeping premium increases in check.
The competitiveness of the International Health Insurance market, the rising demand and scope for growth into developing parts of the world, like East Asia, are keeping insurers on their toes. We can expect a continuing stream of innovative products and new solutions as insurers contend for market share.
The National Bank of Fujairah (NBF) and the Oman Insurance Company (OIC) have signed a lucrative strategic agreement that will pave the way for the bank to release a number of new insurance products in the near future.
The latest deal comes a month after Oman Insurance Company signed a similar agreement with another leading bank in the United Arab Emirates, Commercial Bank International. It comes as no surprise that OIC have signed two major deals that should offer its products to more customers in quick succession This is because at the beginning of the year OIC CEO, Patrcik Choffel, announced that the company would pursue a goal of offering their products to an even great number of people across the Middle East, exactly what these agreements have achieved.
Oman Insurance Company’s stature as one of the biggest and most stable insurance companies in the region was cemented after being rated ‘A’ by rating agency, AM Best and ‘BBB+’ by Standard and Poors. However, their main competitor, Gulf Insurance Company, was given two ‘A-’ ratings from both agencies, and was announced as the ‘Best Insurance Provide in the Middle East 2012′ meaning that for now at least, OIC remains the second biggest local insurer in the region.
OIC’s deal with the National Bank of Fujairah should see the bank offering customers new bancassurance general and life insurance products. According to Sharif Mohamed Rafei, the bank’s Head of Retail Banking, the products “will strengthen our [NBF] efforts to become a one-stop destination for our customers’ financial and security needs.” He went on to say that the new bancassurance products will be “convenient and competitive products to meet their [the customer's] needs.”
It’s a high profile merger in the UAE, not only because Oman Insurance a leading company in the region, but also NBF recently picked up awards for the Best Commercial Bank, Trade Finance and Treasury Management at this year’s Banker Middle East Industry Award.
The Middle East insurance sector is becoming an increasingly lucrative industry. As insurance penetration is estimated to be lower than 10 percent in the region, there is still a large segment of the local market which is not adequately being served – pointing to significant upside if OIC is able to capitalize on the existing coverage gap. A low level of penetration is part of the reason why teaming up with banks and expanding reach can be extremely beneficial for OIC and other Gulf insurers.
Speaking about the agreement, National Bank of Fuajirah’s CEO, Dane Cook, explained that the deal signified the banks desire to expand into new areas of banking products: “NBF has traditionally focused on its core strengths in corporate and commercial banking, trade finance and treasury, and we now see an opportunity to deepen our longstanding client relationships with a wider range of personal banking products.”
The insurance market in the UAE, where the deal will have the greatest impact, is expected to grow at a double digit rate from 2010 to 2015. As OIC are the biggest insurer in the country, they are expected to benefit greatly.
One area of rapid growth that will not benefit Oman Insurance Company is the huge expected increase in the number of people purchasing Takaful (Islamic Insurance) products. In the past, the UAE’s Takaful industry alone has experienced an astonishing 135% increase in growth. However, laws specifying that Takaful operators cannot also offer conventional insurance, lead OIC to opt out of offering Takaful products, as they would risk losing huge amounts of customers with conventional coverage.
Insurance Companies Mentioned
Oman Insurance Company
Oman Insurance Company was founded in 1975 and is one of the leading insurers in the Middle East. They specialize in a whole range of insurance products including life, health and small business insurance.
Gulf Insurance Company
Established in 1962, the Gulf Insurance Company is the largest insurance company in Kuwait, and one of the largest in the Middle East. GIC specialize in a variety of insurance products ranging from life and health to marine and aviation insurance.
Over the past year, the Middle East & North African (MENA) Region has experienced stable A.M. Best ratings for its insurers and reinsurers, as well as an increase in A.M. Best rated entities. This has been occurring against a tumultuous backdrop of political and public unrest, making the relative stability of the MENA market an achievement in its own right.
Although there has been a 3 percent drop in the number of financial strength rating (FSR) “A” (Excellent) companies, the overall ratings remain consistent.
Three companies to maintain an “A” rating, all based in the UAE, include Oman Insurance Company, Abu Dhabi National Insurance Company, and Arab Orient Insurance Company. Additionally, the number of A.M. Best rated companies in the MENA region has increased by 40 percent, from 25 insurers to 35 insurers. These ratings exhibit the resilience and untapped potential of the insurance market in the MENA region, specifically in the following countries: Algeria, Bahrain, Egypt, Jordan, Kuwait, Lebanon, Morocco, Oman, Qatar, Saudi Arabia, Tunisia, Turkey, and the UAE.
More recently, A.M. Best’s Europe Rating Services Limited accredited the Gulf Insurance Company K.S.C. (GIC) (Kuwait) and it’s subsidiary, Gulf Life Insurance K.S.C. (GLIC) (Kuwait), with an issuer credit rating of “a-“ and an FSR of “A-“. These solid ratings are a result of GIC and GLIC’s respected profile in many MENA regions, risk-management, and profitability.
Through numerous acquisitions and subsidiaries, such as Bahrain Kuwait Insurance Company B.S.C., Arab Orient Insurance Company, Arab Misr Insurance Group S.A.E, and Dar Al Salaam Insurance Company, to name a few, GIC maintains a strongly supported presence in Bahrain, Jordan, Egypt, and Iraq, above Kuwait.
Furthermore, GIC’s underwriting profits (profits after deducting business and claims expenses) grew 15 percent from 2010 to 2011, totaling KD 9.8 million (USD 35.4 million).
Similar growth occurred in Lebanon with insurance premiums totaling US 317.6 million in the first quarter of 2012. This 4 percent increase is primarily due to expansion of the fire, life, and cargo businesses. The Association of Insurance Companies in Lebanon (AICL) reported a 14 percent increase in fire premiums, and an 11 percent increase in life and cargo premiums. During the first quarter, premiums were distributed as follows: medical insurance premiums at US 96.9 million (30.5 percent), life premiums at US 80.1 million (25.2 percent), motor premiums at US 75.7 million (23.8 percent), fire premiums at US 29.7 million (9.3 percent), workmen premiums at US 10.5 million (3.3 percent), and finally cargo premiums at US 8.8 million (2.8 percent). Insurers in Lebanon also dished out 11 percent more in benefits and claims to their clients during the first quarter.
The forward movement by insurers in the MENA is in part due to reconfigurations in risk management systems. GIC, for example, is part of a respectable group reinsurance program. The company holds most of its capital in equities, and acted to de-risk such investments through practice of new risk management principles, ultimately lowering its need for capital.
While over 90 percent of Qatari companies believe in the importance of risk management in management priorities, only half of these companies have the required resources to run risk management systems. This fact highlights one of the biggest obstructions for MENA insurers over the next year, and while Qatar may be the obvious example, risk management strategies across the region should be addressed in a consistent manner.
Back in Qatar, “risk confusion” and “lack of clear vision” are the biggest obstacles Qatari insurers encounter when dealing with risk management systems, according to a survey conducted by Ernst & Young in co-operation with Qatar Foundation (QF). It seems that most companies implement risk management systems because of regulatory compliance, rather than utilizing risk management as a means of improving the business itself.
The survey also included characteristics of ideal risk management: internal methods to communicate risk and identify risks relating to objectives, active Board involvement, and clear ownership of risk.
Among the events of the Arab Spring 2011 and global financial slowdown it is comforting to witness ratings for insurers, such as GIC, remain excellent on a consistent basis, and as number of A.M. Best rated entities in the MENA continues to grow there are signs that the Market has never been more prosperous. Better ratings for like insurers may be encouraged by improvements in primary financial measures, efficiency, and risk management. Downward movements in ratings could be caused by degradation of risk management systems from excessive expansion or of overall financial performance. Under current circumstances, the trends are promising as more insurers and reinsurers enter A.M. Best’s radar, and the more established companies improve their ratings.
Insurance Companies Mentioned
Gulf Insurance Company
Formed in 1962, Gulf Insurance Company K.S.C. (GIC) continues to provide a broad range of creative insurance solutions. GIC is a public shareholding company, and is the largest insurance company in Kuwait in terms of premiums, covering risks related to Motor, Marine & Aviation, Property & Casualty, and Life & Health insurance.
Oman Insurance Company
Oman Insurance Company (OIC) is based in Dubai, UAE, and one of the leading insurance companies in the Middle East. OIC was founded in 1975, and maintains and excellent FSR rating of “A” from A.M. Best. OIC provides coverage for Life, Health, Motor, and Personal Lines, as well as medium to large industrial and commercial enterprises.
Abu Dhabi National Insurance Company
Established in 1972, the Abu Dhabi National Insurance Company (ADNIC) is a public shareholding company based in Abu Dhabi. ADNIC has established itself as a leading and reliable provider products through its quality and affordability.
A recent study by the Qatar Financial Centre Authority, entitled the GCC (Gulf Cooperative Council) Insurance Barometer has revealed that prospects for the growth of the insurance industry in GCC countries are extremely bright. The GCC includes the nations of Bahrain, Saudi Arabia, Qatar, Oman, the UAE, and Kuwait.
The study conducted by the Qatari organization was conducted through a number of interviews with more than 20 senior executives of leading local and international insurance companies and was intended to gauge their forecasts for the relative health of the peninsula’s insurance market over the coming years.
Over 60 percent of the individuals and companies surveyed stated that they expect the insurance industry to grow over its current levels by 2015 – the GCC’s insurance market is currently valued at US$ 15 billion.
While the market is situated to lead GDP growth in the nations represented in the GCC, this should not be seen as an indication that higher premiums are over the horizon; more than 70 percent of respondents to the study stated that they believed the premiums associated with insurance products in the region, across all business lines, would remain relatively stable for the next 1-2 years.
An example of the dynamic growth currently being demonstrated across the Arabian Gulf can be seen in Bahrain’s insurance market.
In 2011 insurance sales contributed 8 percent of Bahrain’s GDP, up from a mere 3 percent in 2003. This massive upswing in the relative value of the Bahraini insurance market as part of the GDP follows on from increased local penetration for domestic insurance products which grew from 1.95 percent to 2.55 percent from 2002 to 2012.
On top of increased penetration levels the insurance industry of Bahrain, a country of only 1.2 million people according to the 2010 census, actually tripled in size between 2003 and 2012; the Bahraini insurance sector grew by a staggering 335 percent during that period.
The types of insurance products being purchased in Bahrain have also experienced a shift in the last decade, which may account for the increased levels of growth being demonstrated in the market. The sale of medical Insurance products grew by a staggering 1840 percent which may be due to the proposed legislation to mandate employer provided health coverage in the country; however, Marine and Aviation products saw a loss, shrinking by 13 percent during the same period.
The number of providers entering the Bahraini insurance market has grown in tandem with the industry’s overall growth levels.
In 1995 Bahrain had issued 109 insurance licenses, by 2010 this had jumped to 171; a massive 57 percent increase in the number of registered insurance companies legally allowed to do business in the country.
The growth in the number of insurers is indicative of a trend which is being felt across the GCC region – foreign insurance giants, increasingly feeling the burden of struggling markets in western countries are ever more turning to the Middle East and Asia as key development prospects.
In fact, according to the GCC Insurance Barometer Study, approximately 60 percent of those surveyed stated that they expect foreign insurance companies to increase their market share by 2014.
The fact that the GCC has an extremely health expatriate community will not hurt the Foreign insurers in terms of market penetration, as locally based expatriates prefer to obtain their coverage from organizations which they are familiar with in their home nations.
According to the CEO of Arig, a Bahraini based insurance company, Yassir Albaharna, “Foreign insurers continue to show much appetite for the GCC region and increasingly teaming up with local partners rather than establishing a green field presence.”
Other respondents to the Insurance Barometer study cited foreign companies’ higher levels of technical expertise, customer focus, distribution networks, and financial backing as key reasons why these organizations, and not GCC based insurers, would be best placed to capitalize on the recent success of the region’s insurance sector.
A majority of respondents expected to see strong growth in the region’s Takaful Market. However, contrary to this expectation, Takaful insurance, products adhering to Islamic Muamalat laws, have been one of the weakest lines of business in Bahrain. Takaful products have seen a loss each year for the last decade, except during 2010 when Takaful lines posted a 32 percent overall profit.
A number of the organizations and individuals surveyed for the GCC Insurance Barometer study, while not in the majority, indicated that they felt Takaful was falling short of the expectations which local providers had hoped this line of business would achieve, and termed the performance of Takaful products “disappointing.”
While not totally sidelining the possibility of a Takaful resurgence in the coming years, as the products did in Bahrain during 2010, it was indicated that Takaful insurers would need to develop compelling business models in order to realize success in the vibrant GCC insurance sector; a lack of compelling business models has been highlighted as the prime reason for the relative under-performance of these types of products.
In general, the future is bright for the insurance industry throughout the Middle East. With a number of initiatives on the cards, including mandated employer-provided health insurance for a number of countries in the GCC bloc, and improved regulation of domestic insurance markets in these countries, the Middle East can be said to be a shining opportunity for insurers globally.
Both Qatar and Dubai are well placed to become regional insurance hubs, reports have revealed, following the creation of a Governmental partnership with Samsung Life Insurance in Dubai and the implementation of a national health insurance law in Qatar.
According to a Financial Times report, the Investment Corporation of Dubai is set to agree to a memorandum of understanding with Korea’s largest Life Insurance underwriter, Samsung Life, to deliver high quality life protection products to the Middle Eastern and North African Regions. Historically both underserved markets for life products, the ICD and Samsung intend to grow the distribution of life insurance plans across the region with a view to entering the less developed markets located in Sub-Saharan Africa.
Read the rest of the Qatar and Dubai Set to Become Major GCC Insurance Hubs article
The Emirate of Dubai is reaffirming their commitment to medical tourism by increasing cooperation between public and private healthcare operators through a new national development initiative.
Last week, the Crown Prince of Dubai, Shaikh Hamdan bin Mohammed bin Rashid Al Maktoum, called a meeting with top officials from various government and private sector bodies to discuss the Dubai Health Authority’s (DHA) new initiative on medical tourism and what could be done to fast-track development and promotion efforts going forward. The Dubai government wants to establish the city as both a regional and global hub for medical tourism in order to further diversify the local economy away from natural resource extraction. If successful, new healthcare facilities targeting foreign patients could also work to lift local health standards and create more investment and job opportunities at home. The crown prince made it clear at the meeting that Dubai’s healthcare sector needed a unified approach going forward to overcome previous inter-departmental squabbling and muddled promotional efforts, which have resulted in many citizens leaving the emirate and heading overseas for medical treatment. A lack of cooperation between state and private sector players has been cited by industry analysts as a key impediment to further developing the Dubai medical tourism sector in the past.
Read the rest of the Dubai Ramps Up Medical Tourism Effort and Health Insurance article
Insurance policyholders in the Emirate of Dubai could soon enjoy greater efficiency and transparency when filing a claim following the launch of a new electronic database system by the government this week.
The Dubai Health Authority (DHA) announced on Sunday that they had officially launched their electronic website portal for health insurance claims in Dubai. The scheme, administered by local healthcare informatics and consulting firm Dimensions Healthcare solutions, is expected to be used by all hospitals and clinics in the Emirate. In its initial phase, the DHA database will cover the claims made under the Dubai government’s health insurance program, commonly referred to as Enaya, but could eventually be extended to policyholders enrolled with other insurance providers across the Emirate as well. It is the DHA’s long term objective to ensure that every claim in Dubai is captured and backed up electronically to help minimize insurance fraud and abuse, and improve quality of life and healthcare outcomes across the Gulf.
Read the rest of the Dubai to Launch Electronic Claims System AND Health Insurance article
Fresh media reports out of the UAE this week indicate that the region’s burgeoning medical tourism market may be curtailed by ongoing healthcare capacity problems, regulatory issues and other market forces.
The United Arab Emirates is the largest medical tourism market in the Middle East, drawing an estimated 4.3 million people to the country each year for healthcare and wellness services. An article in Dubai-based English language journal, the National, this week asserts that while the private healthcare sector has done a good job in promoting the UAE as an attractive international medical tourism hub so far, the market’s existing medical infrastructure may not be ready to handle a further influx of tourists.Read the rest of the Health Tourism in UAE Keeps Up article.
Prominent international expatriate medical insurance company, William Russell, announced this past week that they are finally bringing their award-winning global health, life and income protection plans to businesses in Abu Dhabi through a new partnership with a local firm.
William Russell’s global health insurance plans are designed to provide expatriate staff with access to the high-quality private healthcare services they need whilst living and working overseas. Global medical insurance plans often appeal to large multinational corporations who need to provide quality benefits, usually with minimal restrictions and worldwide cover, for their discerning senior executive employees. While these high-value international health insurance products have been available in the United Arab Emirates (UAE) for some time, strict health insurance regulations barring non-locally domiciled providers had prevented the sale of William Russell policies in the Emirate of Abu Dhabi.
Read the rest of the Abu Dhabi Health Insurance article
There may be boom times ahead for the UAE travel insurance market, as both inbound and outbound tourism numbers begin to rebound after a difficult couple of years. One of the Gulf state’s largest insurance companies has predicted travel insurance sales could now grow by 40 percent in 2012 alone.
Speaking at the Dubai Economic Outlook 2012 presentation on Wednesday, Sheikh Ahmad Bin Saeed Al Maktoum stated that the UAE economy would expect to grow by around 4.5-5 percent this year, and that the Gulf’s tourism and travel sectors would be major contributors to the country’s commercial development going forward. Buoyed by vast oil and gas wealth, the UAE economy had moved at a brisk pace up until the 2008 global financial crisis, when Dubai’s once powerful property and construction sector required a massive US$26 billion government bailout to restructure their considerable debts. This event of course impacted other sectors of the economy as well, with foreign investment and tourism declining in tow.
Read the rest of the Dubai Travel Insurance Sector Expects Growth article
UK-based Aviva is moving to build a network in the United Arab Emirates to provide international health insurance products to expatriates situated on the Arabian Peninsula.
Many countries in the Gulf Cooperation Council (GCC) are facing rising costs of healthcare, often due to a rising number of instances of lifestyle related diseases such as diabetes and heart disease. Abu-Dhabi alone spends approximately AED1 billion (US$272 million) every year on healthcare costs associated with treating young diabetics at risk of suffering heart disease in the future.
Read the rest of the Abu Dhabi Health Insurance article
The ongoing civil strife and revolutions occurring throughout the Middle East and North Africa could have a negative impact on the further development of insurance markets in the region, according to a new special report published this week by AM Best.
2011 will forever be known as a year of mass social unrest and political turmoil in the Middle East and North Africa (MENA) region, where revolutions in certain countries have not only taken a considerable human toll on local populations but have also affected the region’s financial risk systems and overall business environments for potentially years to come. In ‘Protests Alter Forecasts for Premium Growth in MENA,’ worldwide insurance information and credit ratings agency AM Best examines the financial impact of the Arab Spring protest movement, country by country, and how it has altered the international insurance industry’s prospects in the region.
In general, periods of sociopolitical unrest and upheaval will pose considerable problems to a nation’s insurance industry, disrupting business patterns and affecting liquidity, according to AM Best. For the insurers themselves, premium levels can often stagnate due to business days lost due to unrest and other prolonged inabilities to collect on policies. In addition, while claims directly resulting from revolution and civil war are typically excluded, the incidence rates of claims overall can be higher in the aftermath and firms will have to find ways to absorb these losses. Moreover, if wide scale changes to a country’s government occur, insurance regulations could follow suit and the performance of previously prominent state-backed companies could be affected. Alternatively, the rating agency noted, certain business lines can in fact benefit from these tumultuous times, with premium levels for cargo and marine cover due to rise in tow with expected oil prices, as well as reinsurance opportunities arising from reconstruction efforts and government infrastructure spending.
Overall, AM Best reiterates that premium growth will continue to be closely linked to economic activity. “Specifically, a country’s growth in inflation-adjusted insurance premiums is determined, at least partially, by the overall level of real economic activity in that country. Nominal gross domestic product growth historically is highly correlated with insurance premium growth,” the ratings agency noted. Thus political turbulence which fosters business uncertainty could affect the development of the region’s insurance markets going forward.
Although the political situations in several MENA countries are still far from resolved, AM Best was able to use the most recently revised economic growth data provided by the International Monetary Fund (IMF) to forecast how the region’s insurers may expect to perform in the near future. In September, the IMF downgraded the economic growth projections of 8 MENA region countries, including Algeria, Bahrain, Egypt, Syria and Tunisia, and raised the forecast for 7 others. Although Syria is the only country expected to slip into a formal recession, the IMF noted that the unrest is expected to negatively impact the economies of many MENA nations in 2011, with growth rates generally returning to their original pre-crisis path by around 2013 or 2014. The IMF held the potential long-term disruptions in key business sectors of MENA economies, chiefly, tourism, private financing (particularly foreign direct investment) and the oil industry, accountable for the reductions in GDP projections. Tourism and investment activity, in particular, are highly dependent on consumer and investor confidence, and have been shaken by the pervasive turbulence of the Arab Spring. Equity markets across the MENA region have been down 16 percent on average since the start of 2011, ranging from the full rebound in the Qatar exchange to a massive 41 percent drop on the Egyptian exchange.
Using the IMF’s updated forecast, AM Best found that the Arab Spring protests will affect the insurance industries of each country in different ways, although the projected impact on premiums overall in the region is not expected to be too severe, owing primarily to the relative immaturity of the MENA insurance sector in general. According to AM Best’s calculations, the impact the widespread unrest will have on markets ranges from Syria’s projected insurance premiums in 2015 being around 14 percent lower than they would have been before the protests, up to Turkey’s projected premiums in 2015 being in fact 1 percent higher. Of the 16 countries surveyed in the MENA region, 10 are expected to post lower premium growth in the aftermath of the Arab Spring, namely, Algeria, Bahrain, Egypt, Jordan, Kuwait, Lebanon, Oman, Qatar, Syria and Tunisia, with Egypt and Syria experiencing the largest expected declines in growth due to unrest. Relative to country risk metrics, with the exception of Tunisia, all of these markets where the impact from the Arab Spring is judged greatest were already classified in AM Best’s highest country risk tier. Meanwhile, 5 MENA countries are projected to remain unaffected or experience modest gains, with more than US$2 billion in projected premiums in 2015. These countries are Israel, Morocco, Saudi Arabia, Turkey, and the UAE.
While these findings could indicate a significant shift in the MENA insurance industry, premium levels for the whole region are projected to only be 0.7 percent lower in 2015 than they otherwise would have been without the protests. “Thus, while the overall effect of the protests in the short-to-medium run is negative, it will be relatively minor on the regional insurance industry,” AM Best noted. The rating agency’s findings leave us with two profound conclusions, one is that political upheaval does not necessarily destroy a domestic insurance industry, and the other is that there is still considerable opportunity for foreign investors to build the insurance trade in the MENA region.
Rating Agency Mentioned
A.M. Best Company was founded in 1899 and is a full-service credit rating organization dedicated to servicing the financial services industries, including the banking and insurance sectors.
Dubai’s upcoming national health insurance system, designed to cover every employee in the Emirate, has been delayed for at least two years. Those who have found themselves priced out of private health insurance policies now face a longer wait for treatment options.
The Dubai Health Authority (DHA) announced on Tuesday that they had officially postponed the implementation of compulsory health insurance requirements for local employers for two more years. In Dubai at present, there are some private sector employers that provide insurance for their staff or negotiate directly with hospitals over treatment plans, but many workers are still left without insurance and struggle with medical costs. The new insurance system, which would make healthcare a required benefit for every worker in the Emirate, has been in development for quite a while. Laila Al Jassmi, DHA chief executive of health policy and strategy, told local media that moving the start date for national health insurance requirements in Dubai was made necessary due to the structural and economic challenges now facing the local labour market. “We have the models. But what we need to do is revise the model towards the existing status of the people and businesses in Dubai,” Laila Al Jassmi told the National, adding that “If you look at the emirate now, most of the private sector provides some kind of health insurance coverage. However the blue-collar workers are a major segment who is mostly not covered. The new policy will be a complete policy that will cover everyone.”
The growing number of uninsured residents has become a significant issue in Dubai, particularly amongst the emirate’s sizeable expatriate workforce. According to the most recent Dubai Household Health survey, around three-quarters of all Indian, Asian and Arab expatriates had no health insurance cover in 2010. This issue has been further exacerbated by the rising costs of public healthcare. Dubai residents who do not have employee-sponsored private coverage can apply for health cards that are supposed to grant them access to public health facilities at a discounted rate. However, with the rising costs of treatment, those health cards effectively offer no discounts now. Treatment costs in government hospitals have risen to roughly the same as those of private hospitals, with a consultation costing between Dh250 to Dh400 (US$75 to US$120), and a one night stay in the Intensive Care Unit costing around Dh3100 (US$845). Many uninsured workers struggle with these medical bills and thus often skip vital consultations and medical treatment until it’s too late. Maintaining affordable access to necessary services like healthcare remains an issue for many expatriates in Dubai.
The DHA’s original plan called for a tax on local businesses that chose not to cover their staff with a private health insurance policy. The law would require that employers pay the Dubai government between Dh500 (US$136) and Dh800 (US$218) a year per employee. These employees would then be made register with a licensed outpatient clinic and become eligible for basic healthcare services. Since 2005, Abu Dhabi has had a similar law in place, and this has helped the emirate cover around 98 percent of its workers. The Abu Dhabi Health Insurance Law states that active employers or sponsors in the Emirate must provide some form of health insurance for job-related illness to employees and their family members. This includes cover for an employee’s spouse as well as insurance for up three children aged 18 or lower as long as they are in the Emirate. Since last year, those failing to comply with the ruling would be subject to a fine of at least Dh300 (US$82) per employee per month. It must be said however that proper enforcement for Abu Dhabi’s policy was only introduced in the past week.
Dubai’s compulsory health insurance scheme was originally scheduled to come into effect in January 2009 but the aftermath of the global financial crisis on Dubai’s private sector and property market necessitated a delay. After the financial crisis, some multinational companies decided to pare down their employee cover, while others began to share premium costs with the employees. Labor costs may have to adjust further so that employers can afford to adequately pay and give benefits to their staff.The official deadline for the introduction of compulsory health insurance is now 2013.
Moving the launch date for the health insurance scheme back a couple years puts it in line with the government’s 2011-2013 three-year plan, which includes several other initiatives tasked with improving the Emirate’s healthcare system. Among them is a national strategy to improve healthcare funding. To accomplish this, the DHA is developing a National Health Account that will monitor Dubai’s overall healthcare expenditure and compare them to investment priorities in the other Emirates. According to the World Health Organization (WHO), the UAE as a collective spends 2.5 per cent of its GDP on healthcare. Comparatively, this is much lower than many Western countries. However, since the UAE is a tax-free country, as healthcare costs rise they become more difficult for the government to carry entirely on their own.
The National Health Account is also designed to support greater private sector development in the local healthcare industry. Public healthcare facilities in Dubai currently account for 39 percent of all outpatient services, with the rest provided by the private sector. The DHA wants the number and quality of private hospitals and clinics in Dubai to expand further and lift the burden off the public treasury. This will be necessary to not only maintain a sustainable national healthcare system but also to give impetus towards growing the local medical tourism industry.
In addition to healthcare budgeting and insurance reform, the Dubai government’s three-year plan calls for an improved national medical information database, taking advantage of modern mobile network technology to guarantee transparent business practices. The DHA believes the public will be better served if they have access to data which adequately compares service quality and productivity of local hospitals. The Emirate also has plans to train and retain a high quality medical workforce through an improved screening process over education and credentials, in addition to funding continuous education programs, which will keep staff up to date with the latest advances in international medicine.
Dubai Health Authority
The Dubai Health Authority (DHA) is a government organization tasked with overseeing the healthcare sector of the Emirate of Dubai. The DHA was created in 2007 under the directive of Sheikh Mohammed bin Rashid Al Maktoum, the Vice President, Prime Minister, and Ruler of Dubai. Medical care services throughout Dubai can be provided through DHA medical facilities including hospitals (Al Wasl, Dubai and Rashid), specialty centers (The Joslin Diabetes Center) and numerous primary health centers.
Health officials from Abu Dhabi have reissued a warning to all residents in the Emirate to maintain an up-to-date health insurance policy or else face a stiff penalty.
At a conference held yesterday, the Health Authority Abu Dhabi (HAAD) unveiled a new media awareness campaign that aims to publicize the activation of the Health Insurance Law No. 23 of 2005 and to further educate Gulf residents about the tremendous importance of having valid health coverage in the Emirates at all times. The HAAD wants all companies and UAE nationals who have workers under their sponsorship to be aware of the national health insurance requirement as well as the new mechanisms now in place to enforce it.
Read the rest of the Abu Dhabi Health Insurance article
The United Arab Emirates’ large expatriate workforce will soon be subject to a comprehensive medical screening process before being admitted into the country as part of the government’s plan to stop the spread of contagious diseases amongst migrant workers in the Arab state. The new system will also curb the number of workers who slip into the UAE with fake certificates by mandating re-tests once they arrive in the UAE.
Starting on October 1 2011, expatriate workers from Indonesia and Sri Lanka will undergo preliminary screening for 16 medical conditions, including tuberculosis, hepatitis B, HIV/Aids and malaria, in their respective countries of origin before they can be approved for a visa to live or work in the UAE. Some specific categories of expatriates will also be further checked for additional non-infectious health issues such as diabetes, cancer and renal failure. Those who test positive for a specified illness at any of the 220 medical centers throughout Asia that are part of the Gulf Approved Medical Centers Association (GAMCA) will be refused entry into the Emirates. Migrant workers who pass the first screening will then be re-tested in the UAE upon their arrival to confirm results. These same tests will also become applicable for residence visa renewal. Visitors entering the UAE on tourist or visit visas however will be exempt from these new health requirements for now.
The screening process being implemented in the UAE is the first phase of the Gulf Co-operative Council’s (GCC) Expatriate Worker Medical Examination Program, which began in 1995 as a medical fitness system to track the spread of communicable diseases across the Gulf region. This standardized healthcare exam is currently used by Qatar, Oman, Kuwait and Saudi Arabia, and includes tests for HIV/Aids, pulmonary tuberculosis, leprosy and syphilis. All GCC visa applicants must also be up-to-date on all their vaccines, including Hepatitis A and B, influenza and the Rubella virus. The UAE is now the final GCC member country to put this program into action, a state that sees almost 1.7 million new expatriate workers head to the state every year. Now, in collaboration with the region’s leading physician’s advisory group, the GCC technical committee, routine checks will be held internationally to ensure that the highest health reporting standards are maintained and that all newcomers in UAE have genuine accreditation and are free of infectious diseases.
Indonesia and Sri Lanka were chosen as the first two countries to undergo the medical screening system after the GCC technical committee conducted a thorough inspection of their healthcare facilities. These two countries will serve as very useful pilot subjects, as there are currently an estimated 250,000 Sri Lankan and 100,000 Indonesian expatriates working in the UAE. After a three-to-six month evaluation period, the program will be extended towards migrant labor from at least eight other Asian and African countries, including India, Pakistan, Bangladesh, Ethiopia, Nepal, Egypt, Sudan and the Philippines.
Health officials have long expressed concern about the spread of infectious disease among migrant workers in the Gulf, and in particular tuberculosis. The World Health Organization (WHO) has warned that new strains of tuberculosis and other drug resistance diseases have increased globally over the past few years, with new cases occurring most prominently in South Asia, a region that supplies the Gulf with many of its workers. According to the UAE Ministry of Health’s 2009 data, over 21 percent of all Asian expatriates screened for visa renewal tested positive for TB while in the country.
The UAE’s Ministry of Health explained in a statement that the new testing regime was necessary to both prevent the spread of disease and keep adequate records of migrant labor in the Emirates. “The new procedures will positively affect public health and eliminate diseases among newcomers to the UAE who are either coming for work or residence…The most important reason for the implementation of the program in the country of origin is to discover diseases in a suitable time. This achieves the highest protection grades.” The UAE’s previous immigration rules called for similar medical checks for expatriates before securing a visa. However, immigrants were allowed to enter the country and wait for up to a month before the screening process and this could’ve contributed to the spread of communicable diseases in the UAE before the diagnosis was made.
According to the Ministry of Health, instituting a thorough double check process by both the home country and UAE will work to curtail fraud and will lessen the stress and expenses on the UAE healthcare system, which has to treat all patients with communicable diseases at great cost before deporting them. Many of these sickly immigrants would not have been able to fulfill their job commitments in their present condition anyway. The number of people waiting to get tested is also expected to drop as expatriate workers will be deterred from trying to get into the country with faked test results. As part of the GCC’s regional expatriate testing initiative, all screening centers, embassies and consulates are connected through a computer system to ensure transparency and improve security. Health centers found issuing fraudulent health certificates and medical reports will have their license revoked and be fined thousands of dollars.
“Double-testing will positively affect public health and eliminate diseases brought in,” said Salem Darmaki, Acting Undersecretary at the Ministry of Health, at a press conference in Dubai on Wednesday, concluding that “We hope these procedures have a positive impact on public health in society to eliminate diseases among newcomers to the UAE, and reduce the psychological and financial burden in case they fail to obtain a residency visa.”