Sep
19
UAE Steps Up Medical Screening on Expats
Filed Under Expat Insurance, UAE Insurance | Leave a Comment
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.”
Aug
30
Middle East Insurance Slowdown Sees Development of New Products
Filed Under Expat Insurance, Insurance Company, Middle East, Reinsurance, UAE Insurance, general insurance | 1 Comment
A number of financial reports released by Qatari insurance companies on Monday indicate that the country’s insurance sector may be poised to experience a significant slowdown. Five Qatari insurance companies, operating mainly in the non-life insurance market, have indicated that the sector’s total net profits have risen by only 2 percent during 2011, compared to 9 percent for the same period in 2010.
The companies, which include Qatar Islamic Insurance, Qatar General Insurance and Reinsurance, Al Khaleej Takaful, Qatar Insurance, and Doha Insurance, saw the sector’s net profit for January – June 2011 reach QR 545.96 million (US$ 149.91 million), compared to the QR 537.11 million (US$ 147.48 million) in profits seen for the same reporting period in 2010. The data on the general profitability of these five Qatari insurance companies was released by Qatar Exchange data.
One of the primary reasons cited by the insurers with regards to the lower than expected profits in the first half of 2011 is due to the rise in premiums yielded to reinsurance companies. Reinsurance premium yielding has risen by 8 percent for Qatar’s insurance companies in 2011, with three companies actually yielding more than 55 percent of total written premiums to reinsurers. With the levels of premiums being yielded to reinsurers outstripping the total growth in premium revenue for the market, profits have inevitably come in at lower than expected levels.
Profit growth for the first half of 2011 for the five companies, compared to the same period in 2010, stood at:
Qatar Islamic Insurance: 1.83 percent growth in 2011, up from 0.43 percent in 2010.
Qatar General Insurance and Reinsurance: 1.83 percent growth in 2011, up from -7.31 percent in 2010.
Al Khaleej Takaful: 11.29 percent growth in 2011, down from 46.85 percent in 2010.
Qatar Insurance: 10.74 percent growth in 2011, down from 65.77 percent in 2010.
Doha Insurance: -8.80 percent growth in 2011, down from 60.55 percent in 2010.
While the slowdown of the non-life insurance sector in Qatar does not pose major concerns at present, it has highlighted the need to create innovative policies with which to cover underserved segments of the Middle Eastern insurance market.
One company taking notice from the Qatari slowdown is the Dubai Islamic Insurance and Reinsurance Company, also known as Aman, which is headquartered in Dubai, UAE. Aman’s CEO, Hussein Al Meeza, announced the creation of two new types of protection policy which would focus on affording medical cover to Indian expatriates working in the United Arab Emirates.
The Indian Expatriate Medical Insurance plans from Aman are being run in conjunction with ICICI Lombard, one of India’s leading insurance companies. On creating the plans, Hussein Al Meeza said;
“If you check the structure of the population in the UAE and what relation it has with Emiratis, they are our partners; they are our brothers. They are also the people who (are) behind all the work that has been done here. The relationship that we have with the Indian population was not (built) today or yesterday. Also, we have (an agreement) with ICICI Lombard, which is one of the top names in the Indian market.”
Mr Hussein went on to say;
“Europeans already have the culture of insurance. They have very advanced products. We are looking to see where the opportunities are to provide services. We are looking at the Arab world, Pakistanis, Bangladeshis and Filipinos. It needs a background from the countries, because India has a platform for service providers… The Indian (expatriate population) is a big market and there are a lot of opportunities. Also, we got the right partner for the products.”
The policies, named “Rishtey” and “Health on Return,” aims to give Indian expatriates in the UAE a wider choice with regards to their medical cover than they have previously been afforded. The Rishtey plan would see UAE expatriate workers obtain medical insurance cover for their families in India, while the Health on Return policy would provide health insurance protection to those same expatriate workers in the event that they return to India for a short stay. Additionally, the Health on Return plan also offers the expatriate Indian workers the option of having retirement health insurance cover, creating a far more flexible and comprehensive health insurance product than any which currently cater to this niche market segment.
While a slowdown in Qatar’s general insurance market may pose a concern for the region, industry analysts are aware that there exists significant potential with regards to developing ever more unique products for the GCC insurance sector.
Insurance Companies Mentioned
Qatar Islamic Insurance
Founded in 1995, Qatar Islamic Insurance, also known as QIIC, operates a number of lines of insurance coverage. Offering insurance based on Islamic principles QIIC offers coverage for all risks from Aviation to personal protection.
Qatar General Insurance and Reinsurance
Qatar General Insurance and Reinsurance was founded in 1979, and is a Qatari national company. Qatar General Insurance and Reinsurance offers both individual and business insurance products in Qatar.
Al Khaleej Takaful
Founded in 1978, Al Khaleej Takaful operates primarily in the general insurance and reinsurance markets. Covering risks including Property, Engineering, Liability, General Accident, Marine Transit, and Marine Hull, Al Khaleej has proven time and again to be an innovative insurer.
Qatar Insurance Company
Founded in 1964, Qatar Insurance Company, also known as QIC, is Qatar’s oldest insurance provider. Operating a number of personal and business insurance products across the GCC, QIC is one of the most established insurers in Qatar.
Doha Insurance
One of the younger insurance providers in Qatar, Doha Insurance was founded in 2000. Establishing a Takaful products company in 2006, under the name Doha Takaful Insurance, Doha Insurance company offers a range of general insurance products.
Dubai Islamic Insurance and Reinsurance Company
Dubai Islamic Insurance and Reinsurance Company, also known as AMAN, was established in 2002 to provide comprehensive Islamic insurance products to residents of the UAE. Offering Motor, Home, and Medical Islamic insurance products, AMAN is one of the leading insurance providers in the UAE.
Aug
22
Gulf Insurance Industry Set to Take Off
Filed Under UAE Insurance | 6 Comments
A new report released this week by investment banking firm Alpen Capital LLC has highlighted the tremendous potential for growth within the Gulf insurance industry due to the relatively low insurance penetration levels, positive demographic trends and pronounced infrastructure development occurring throughout the region.
According to the GCC Insurance Industry report, insurance business in the Gulf region is set to grow 20 percent annually on average over the next 5 years, moving from US$18 billion in gross premiums in 2011 to over US$37 billion by 2015. The United Arab Emirates and Saudi Arabia will continue to be the two largest insurance markets in the region, with Alpen projecting a 75 percent market share between them by 2015, however Qatar is forecast to be the biggest mover, with a 30 percent compound annual growth rate over the next 5 years.
The Gulf’s insurance industry is undergoing an important transitional period, according to Alpen. These countries are comprised of predominantly small, youthful populations, including in them a high proportion of expatriates, with a high per-capita income and substantial government spending and involvement throughout most business sectors. However, despite their small and relatively affluent population base, the insurance penetration and density level in the region has remained lower than that of their global peers from both emerging and mature market economies.
Alpen Capital believes that the Gulf markets have now reached critical volume and the discrepancy between a rising GDP and stagnant insurance growth will correct itself quickly in the coming years. As the economies in the region mature it will then be incumbent on insurers to better prepare themselves to capitalize on this business opportunity and become competitive on a global scale. “The confluence of economic and structural factors have created an environment conducive for steady growth of the insurance sector,” Alpen Capital surmised.
Each GCC member was broken down and assigned a specific forecast by Alpen. Although the region at large is poised for substantial insurance growth, some countries are more prepared to expand than others.
Bahrain’s insurance industry covers a small, well regulated market that is forecast to expand by 16 percent from 2011-15. The penetration rate in 2010 for both life and non-life insurance policies have remained high in comparison to other GCC countries. The kingdom is also developing a mandatory national health insurance policy for all expatriates, which when completed in 2013 could play a substantial role in driving the growth of the domestic insurance sector. Unlike most other countries in the region, Bahrain has no native citizen employment quotas for business. This will give Bahrain a competitive advantage in attracting business from foreign insurers.
According to the report, Kuwait’s insurance sector is poised to grow by a considerable 17 percent in the next 5 years, in line with a similar double digit rise anticipated in the nation’s GDP over the same period. Kuwait’s insurance industry hasn’t progressed as quickly as others in the region, with the lowest non-life insurance penetration recorded at 0.4 percent. However, recent moves made by the national government to promote takaful, or Shariah-compliant Islamic insurance, is expected to boost growth in this sector considerably. The growing acceptance of Islamic insurance and compulsory motor insurance laws in the country will compliment each other to facilitate demand. The life insurance sector is not expected to progress as quickly, given the extensive social security system available to citizens in Kuwait. Overall, Alpen expects the life insurance industry to grow by 13 percent in Kuwait while the non-life sector expands by 18 percent.
Oman’s insurance industry is the smallest in the region but is forecast to grow by 18 percent in the coming years. By 2015 the total contribution from premiums is expected to reach US$1.7 billion. In 2010 cyclone Phet hit the country’s north coast and drove up awareness and demand for cover. The Oman government is now taking similar steps to others in the region to encourage insurance as a valuable savings tool for its citizens. A compulsory medical insurance scheme is being discussed for expatriates, which could further contribute to industry growth. The country’s demographics also present distinct opportunities. Oman’s median age is 18.8 years old, one of the lowest averages in the region, and this will be beneficial to the domestic insurance sector because a younger population will more likely become aware of and/or purchase insurance policies in the future.
Saudi Arabia is the largest market in the GCC and one that has developed substantially since insurance business was first permitted in the 1990s. The total written premium in the insurance sector is forecast by Alpen to reach US$9.24 billion by 2015 at an 18 percent combined annual growth rate. Due to an ageing population and regulatory initiatives, Saudi Arabia will be the only GCC market in which sales of new life insurance policies are expected to grow faster than that for non-life products. Takaful insurance companies also have a significant presence in the country, and their continued development will help develop awareness and acceptance towards other lines of insurance in the region. Increased participation from the private sector will yield positive additional positive returns.
The UAE insurance sector is already the most developed in the GCC and is forecast by Alpen to grow by 19 percent annually, totalling US$18.3 billion in combined premium by 2015. Insurance penetration and density in the UAE is at the highest levels in the gulf region, and an increase in both native and expatriate populations is expected to only improve upon this trend. Over the past few years, the local insurance and financial markets have been made more open. This has reduced the presence of entrenched national insurance companies and enabled more foreign competitors to operate in the country and rejuvenate the market. Another key factor driving the expansion of the insurance industry has been the massive UAE government-funded infrastructure projects, which were previously stalled or cancelled due to the 2008 global economic crisis. Many of those projects are now underway again and their success could boost the local economy and insurance sales along with it.
Alpen Capital singled out Qatar’s insurance industry as the fastest growing in the region, with total written premiums expected to grow by 30 percent in the next 5 years. This remarkable growth is being driven predominantly by the country’s continued economic expansion, combined with a concerted attempt by the government to diversify Qatar’s industry away from only hydrocarbon extraction and export into real estate, tourism and other commercial endeavours. In diversifying their economic activity Qatar creates a significant demand for an expanded scope of new insurance product lines in the region. Similar to other GCC countries, an increased focus on promoting takaful as well as a potential compulsory health insurance law for expatriates is thought to contribute to demand in the short term future as well. Alpen Capital also points out that Qatar GDP per capita is both the highest in the GCC region and among the highest in the world. This considerable level of consumer spending presents not only opportunity for insurers but for Qatar itself to become a leading regional hub for insurance and investment businesses.
Companies Mentioned
Alpen Capital Group
Alpen Capital Group is an investment banking firm that provides financial consulting services. The firm’s advisory services focus on equity and debt capital markets, credit ratings, debt syndications, and mergers and acquisition consulting, amongst others. Alpen Capital was founded in 2008 and is based out of Dubai, United Arab Emirates.
Aug
3
Mashreq Qatar, the Doha-based arm of one of the MENA region’s leading financial institutions, has this week launched a new critical illness cover policy, titled Wealthcare Insurance, in partnership with MetLife Alico. With the local economy set to continue growing, Mashreq Qatar has been committed to providing enhanced wealth management services for clients in the Emirates and this new insurance proposition follows a slew of additional savings and protection plans, mutual funds, fixed income securities and treasury product based solutions.
The continued advances of research and development in modern medicine has given citizens from all around the world a greater opportunity to be treated for, and overcome previously critical medical conditions. However, with these increased chances in broad survivability have been the rising overall costs of healthcare and pharmaceuticals, which has now left many patients shouldered with significant financial burden. Healthcare consumers worldwide are now demanding more cost-effective treatment plans. MetLife Alico and other international insurers have been working hard with local institutions to address these concerns and have now developed insurance protection in Qatar that offers payment upon diagnosis with worldwide coverage combined with a promise to return the entire premium if there is no claim at the end of the policy term. This joint-venture operation follows similar moves made by other insurers already this summer, including SEIB Insurance’s new contract with Qatar Telecom, the AXA Gulf global health insurance plan ‘Now Health International’, and Agility GHS’ partnership with the Dubai Islamic Insurance & Reinsurance Co. (known as AMAN Insurance).
Mashreq’s new Wealthcare insurance product has been designed to protect one or more customers in the event they are later diagnosed with any of the following health conditions: cancer, heart attack, stroke, coronary disease, heart valve failure, pulmonary hypertension or a benign brain tumor. Customers can pay their premiums either on a monthly or an annual basis with a deductible (sum assured against) of up to US$100,000.
If a policyholder is diagnosed or succumbs to sudden death from one of the above covered illnesses, MetLife Alico will compensate the beneficiary in a lump sum payment after a 120 day waiting period. Mashreq Qatar is confident this arrangement would enable their insured customers to meet all committed expenses, including rent, lost income, and another unforeseen expenses not likely covered by traditional medical insurance during this tenuous period.
Mashreq Qatar noted further that if a policyholder were to remain healthy throughout their coverage period, the insured would then be entitled to a full 100 percent refund on the cumulative premiums paid to MetLife Alico. In the case of death due to an illness or medical condition not covered by the policy, the beneficiary could also be grated a complete refund.
Howard Kitson, country head of Mashreq Qatar, told reporters at the launch of the wealthcare scheme, that their bank would be the sole distributor of this innovative new insurance product in Qatar for the time being. Mr. Kitson was confident that this partnership MetLife Alico would further ensure both the health and economic wellbeing of their customers.
“Our aim is that our customers should be able to afford the best healthcare services while being at peace about the financial well being of their family and loved ones. We have developed this product, with the aim to protect our customers and offer an attractive, convenient and value-added product,” he said to local media on Tuesday.
This launch comes on the back of a productive year for Mashreq. In July, the banking conglomerate reported a 22 percent increase in net profit to AED551.6 million (US$150.2 million), compared to AED453 million (US$123.35 million) for the same six-month period in 2010, all on solid operating income of AED2.2 billion (US$600 million). Mashreq Qatar, in specific, now expects revenues for the rest of the year to increase by more than 40 percent to QAR350 million (US$96.20 million) due to its treasury operations and strong deposit growth. By 2012, Mashreq Qatar expect revenues to top QAR400 million (US$110 million). Despite an economic slowdown following the political turmoil in nearby MENA countries, Qatar’s capital markets and treasury operations have moved on and are becoming a more important contributor to Mashreq’s business.
Furthermore, Mashreq expects Qatar’s economy to continue to grow and benefit in particular from FIFA’s decision to award the 2018 World Cup to the country, as an influx of professionals and contractors will boost deposit growth as well as attract new financing business to the area. The bank has estimated that the Qatari private sector could see around US$120 billion worth of new contracts as business rush to upgrade and expand the Emirate’s infrastructure in time for the soccer tournament. As more wealth is created in the region, an emerging middle class will demand more insurance services.
For MetLife, a deal to enter Qatar’s insurance market marks the latest move the leading US life insurer has made to expand its international exposure and distribution platform following its purchase of American Life Insurance Company (ALICO) from AIG for US$15.5 billion in 2010. The acquisition of Alico has given MetLife quick access to new Asian, European and Latin American insurance markets and they been rewarded already as the international segment reported operating earnings had increased by US$507 million from US$142 million in the year-ago quarter. This influx of new international business, led by the ALICO deal, has helped MetLife’s premiums grow a remarkable 41.2 percent year over year to US$9.3 billion. As the global economic order subtly changes in the wake of the 2007-2008 financial crisis, multinational insurers such as MetLife have found value in re-positioning their activities to ensure that they have greater access to the emerging markets which are now providing all insurers with the most profound sales and earnings growth opportunities.
Companies Mentioned
ALICO
The American Life Insurance Company, known as Alico, provides a broad, innovative range of insurance and savings products for individual customers, corporate customers and high net worth clients. Their products include; health insurance, life insurance, savings plans, accident insurance, retirement planning and travel insurance among others services.
Mashreq
Mashreq is one of the UAE’s leading financial institutions. Mashreq provides global mutual funds, insurance products, treasury products and fixed income securities. Founded in 1967 as then the Bank of Oman, the bank has played a pioneering role in the regional industry, particularly in the retail banking sector.
MetLife Inc.
Possessing over 140 years of insurance expertise, MetLife aims to be an innovator in the field of international Life insurance. Globally, MetLife is able to offer its clients accident and health insurance, life insurance, disability income protection, and retirement and savings products.
Jul
13
Gulf Insurance Restructuring Continues
Filed Under BUPA, UAE Insurance | 3 Comments
The United Arab Emirates is working hard to revise many of its regulatory policies to better conform to GCC laws, applicable through its membership in the Gulf Union. This restructuring effort could involve the adjustment and merger of some of the nation’s legislative and regulatory institutions, most notably the dissolution of the UAE Insurance Authority.
The insurance sector has continued to develop admirably in the United Arab Emirates. The Insurance Authority’s most recent report revealed that the total volume of underwritten insurance premiums in the UAE was AED22 billion (US$6 billion) for 2010, a 10 percent increase over the AED 20.1 billion (USD 5.5 billion) recorded in 2009. The total invested funds in the insurance sector meanwhile topped AED 27.6 billion, with national companies enjoying more of the windfall than ever before.
The UAE, long known as a broker market, has retained an institutional distinction between banking and investment services. Banking has been supervised by the UAE Central Bank, while insurance services are regulated through the UAE Insurance Authority. This has unfortunately resulted in numerous grey areas whereby regulators have been unable to properly apply and monitor their market reforms. Reorganizing the relationship between the Central Bank and Insurance Authority will hopefully produce a standard set of regulations across the UAE to properly address risk and guarantee the necessary consumer protections now required in a global economy.
Sources close to the situation have confirmed that the UAE Insurance Authority will likely be dissolved later in the year. The institution was first established in 2007 to oversee and pass legislation governing the regulation of the insurance industry in the UAE, including accreditation for both local and foreign registered insurance entities. In the wake of the global economic downturn, the Insurance Authority began tightening its regulatory efforts to closely match their regulatory frameworks in line with best industry practices elsewhere. The Insurance Authority was among many regulators in the Gulf at the time seeking to better police the insurance industry, particularly the intermediary sector. These businesses were failing to comply with the new capital requirements first set for brokers in December 2006. Last year, the Insurance Authority singled out and removed almost sixty firms, now leaving around 145 brokers still standing in the region. These efforts have lead to the institution extending its supervision to insurers already regulated by other bodies in the region, such as the Dubai Financial Services Authority, which also created perhaps an oversight redundancy.
To date the UAE Insurance Authority has issued nine licenses to insurers who wish to operate in the Emirates insurance industry. In March, the institution put forth draft resolutions aimed at better controlling investments within the country’s insurance market. The proposal would both set maximum limits on funds invested as well as minimum cash reserves held by active insurance firms that would be proportional to their standing capital. The Insurance Authority has also recently embarked on a process of unifying its electronic database across all insurance companies in order to soon provide a one-stop location for those interested in UAE motor vehicle insurance online, with the option ready to extend its services into other countries in the region as well. It is hoped that efforts likes this will gradually lead to either a harmonization of requirements across the region, or reciprocal arrangements between the various countries, and ultimately allow for better cross-border provision of services
Similar to other Middle Eastern states, the UAE authorities have also expressed concerns about the dominance of the expatriate workforce in the local insurance sector. Fatima Mohammed Ishaq Al Awadhi, deputy director of the Insurance Authority, intimated that the UAE may not give approval for another insurance firm to operate in the country unless it employed a sufficient number of Emirate citizens. Out of 7,271 employees currently working for insurance companies in the UAE, only 397 are citizens, an ‘Emiratization’ rate of 5.5 per cent.
The regulatory tasks and responsibilities of the Insurance Authority will be redistributed to other organizations as the institution is phased out during the year, including the issuance of new licenses for insurance, financial and investment companies looking to set up business in the country. More specifically, responsibilities for the license accreditation of UAE investment companies will be removed from the jurisdiction of the Security and Commodities Authority (SCA) and bestowed upon the Central Bank, while licenses involving insurance companies and brokerages (previously the Insurance Authority’s responsibility) will be now reassigned to the SCA. The SCA has also been authorized to monitor and process the licenses of all brokerages in the financial sector as well. These consolidation moves have been made to make domestic regulatory authorities better adhere to international best practices.
The increased involvement by the Central Bank in the insurance sector comes as the UAE considers setting up a system to guarantee small bank deposits of below AED1.5 million (US$410,000). Similar insurance plans were approved for larger deposits earlier in the year as part of a strategy to better ensure long-term financial stability in the region. The amount insured would either be carried by the banks or jointly by both banks and depositors as it is in financial systems in other countries. Many bankers in the region have thus far rejected the proposal citing unnecessary costs and the UAE banking sector’s strong capital position as a guarantee of stability.
Other countries in the Gulf region have also been busy updating their regulatory infrastructure and implementing social reforms to address institutional difficulties. This week, the Kuwaiti government signed an insurance contract worth GBP 1.8 million (US$2.8 million) with BUPA to provide private health insurance for all Kuwaiti students currently pursuing higher education in the United Kingdom.
BUPA currently serves over 2,000 students in the UK, and provides the necessary experience to ensure Kuwaiti expatriates will be well protected while abroad. The insurance policy with BUPA will include treatment for most medical and dental services available in both private and public hospitals and clinics. While visiting the United Kingdom it is important to have health coverage. The British government has renewed efforts to clamp down on the abuse of its NHS services by foreign nationals.
Kuwait Health Minister Dr. Hilal Al-Sayer told reporters that this deal demonstrated Kuwait’s intentions to provide the best services for its students to help them better learn and compete with their counterparts from other countries on more equal footing. The Ministry also planned to raise allocations for foreign medical treatment across the rest of Europe and the US. This policy was important as it would enable Kuwaiti expatriates to better adjust to high standards of living in European countries, the minister added.
Insurance Companies Mentioned
Bupa
Bupa was established more than 60 years ago in the UK and now has ten million customers in over 190 countries, and over 52,000 employees around the world. Bupa is a leading international healthcare provider, offering personal and corporate health insurance, workplace health services and health assessments. As a provident association Bupa has no shareholders, because of this it uses its profits to invest in healthcare and medical facilities around the world. Bupa has operations around the world, principally in the UK, Australia, Spain, New Zealand and the US, as well as Hong Kong, Thailand, Saudi Arabia, India, China and across Latin America.
Jun
27
Lloyds moves into Saudi Arabia with RFIB
Filed Under Insurance Company, Middle East, UAE Insurance | 4 Comments
RFIB Group, the international Lloyd’s insurance and reinsurance broker, has been approved for an intermediary license by the Saudi Arabian Monetary Agency (SAMA) to commence its insurance and reinsurance operations in the Kingdom of Saudi Arabia.
RFIB had been active in the Saudi Arabia insurance market for nearly three decades, but renewed regulatory efforts initiated by SAMA last year have required all foreign brokers operating in the Kingdom to attain a license.
Upon the successful receipt of the license, RFIB has now established a branch office in the Saudi capitol city, Riyadh. SAMA also required RFIB Group to select a Saudi Arabian business partner to set up its Riyadh unit. The company has partnered with Bassam Al-Dhabaan, which now owns 40 percent of the local business.
This move follows RFIB’s entrance into the Russian market earlier this year, with the establishment of new Moscow-based retail broker Anglo Russian Insurance Broker (AnRu). AnRu operates as both an insurance broker and an agent targeting corporate retail business. AnRu already has several agency contracts signed with leading local insurance companies, and is expected to rapidly develop in 2011, according to RFIB.
At the outset, RFIB’s new Saudi office will handle reinsurance business, but after its first year of operation the company intends to explore further opportunities in more specialized retail insurance businesses. The Saudi subsidiary will be headed by Anthony Harris, a former British Ambassador to the UAE who been working for RFIB in the Middle East since February 2006.
On the establishment of the new RFIB unit, Anthony Harris said in a statement: “RFIB has been handling reinsurance risks from the Saudi market for nearly 30 years, but our new insurance and reinsurance broking license is the final stage in our establishing a domestic presence in this important and growing market and we would like to thank SAMA for their help in working with us to achieve this license.”
RFIB have also appointed Naji Tamimi, a Saudi national previously at local firm Malath Cooperative Insurance & Reinsurance Company, as the new office’s deputy general manager. Currently the RFIB offices have four full-time staff members and will soon look to ramp up recruitment efforts. The company eventually intends to have at least 50 percent of its staff be comprised of Saudi nationals.
Adrian Spooner, RFIB’s managing director in the Middle East, commented on the company’s expansion strategy: “Naji’s appointment as Deputy General Manager has been invaluable in establishing our new office in Riyadh. His long experience in the market and extensive contacts will be crucial in growing our business in the Kingdom. We now intend to seek further recruits from the local market, working closely with our international team in London to aid staff training and development.”
Saudi Arabia’s labor market has become a sensitive political matter in the Kingdom. In the midst of regional unrest and a considerable 10.5 percent unemployment rate, creating job opportunities for Saudi nationals has become a priority. Various schemes are being discussed by the government that will evaluate the employment of native Saudis by private companies and differentiate between those that have achieved high ‘Saudization’ rates, and others who have not; with stricter limits on foreign work-permits a real possibility going forward. Saudi Arabia employs around 8 million expatriate workers, 6 million of whom work in the private sector.
While foreign employees may not necessarily be in demand, outside capital certainly is becoming more welcome in the MENA region. Insurance House, a recently launched Abu Dhabi based insurance company, agreed at a shareholders meeting to raise the limit on foreign ownership of the business to 25 percent of the company’s paid up equity share capital. The move comes just days after Insurance House’s public listing on the Abu Dhabi Securities Exchange (ADX).
Insurance House provides insurance services to Gulf businesses and individuals from its headquarters in Abu Dhabi, and branch offices in Dubai and Sharjah. It has a listed paid-up capital of Dh120 million (US$32.7 million). Last month the insurer raised an additional Dh66 million (US$18 million) as it sold 55 percent of shares to the public. The share issue was available exclusively to UAE nationals at a minimum subscription of 25,000 shares per investor.
Mohammed Alqubaisi, chairman of Insurance House, spoke admirably of the company’s development. “[The IPO] is another milestone for Insurance House. We will always strive for excellence and will endeavor constantly to create value for our existing shareholders. Additionally, we will give an opportunity to foreign investors to participate in our promising venture by building a successful and established relation with them,” he said in a statement.
The Insurance House’s decision comes after a similar vote last week by First Gulf Bank, UAE’s second largest bank by market capitalization, to increase foreign ownership limits from 15 to 25 percent. UAE firms are seeking an upgrade to “emerging-market” status from “frontier market” by international index provider MSCI.
The MSCI cited the UAE’s tight limits on foreign ownership of listed companies as one of the key barriers currently preventing an upgrade to the market’s status. An upgrade to emerging-market status could drive an increase in international investment in companies throughout the Emirates. The limit for foreign ownership of listed companies in the UAE is 49 percent.
At present, non-Gulf foreigners ownership accounts for 8.5 percent of equities listed on the UAE markets, with holdings of Dh12.4 billion (US$3.37 billion). UAE citizens hold around 91 percent of all equities and the remainder is made up by other Gulf nationals.
Opening up further foreign investment opportunities in Gulf companies is expected to continue, according to market analysts. As more firms go public on local indexes they will need to amplify the visibility of their stock and increasing outside ownership limits is an effective way to get more attention.
Companies Mentioned
RFIB
RFIB Group is an international Lloyd’s insurance and reinsurance broker. The company provides insurance for a variety of risks associated with both facilities and personal casualty. In addition, RFIB offers an assortment of reinsurance products; and acts as broker and consultant to other direct and reinsurance brokers. The company’s clients include corporations, banks, insurance and reinsurance companies, captives, groups and individuals. RFIB was founded in 1980 and is based in London, the United Kingdom with branches worldwide.
Insurance House
Insurance House was launched in May 2011. The company provides a wide variety of insurance products and services to businesses, groups and individuals from its headquarters in Abu Dhabi, in addition to branches in Dubai and Sharjah.
Jun
3
Agility GHS Commences Operations in Dubai
Filed Under UAE Insurance | 1 Comment
This week, South Africa-based medical system administrator and managed care provider, Agility Global Health Solutions, began operations in the Middle East through a joint venture agreement with a local insurance conglomerate.
Agility GHS’ partnership is with the Dubai Islamic Insurance & Reinsurance Co. (also known as AMAN Insurance). The joint venture, named Amity Health, provides various coverage options throughout all Gulf Co-operation Council (GCC) countries and will develop the presence of Agility GHS services in the region’s growing private healthcare market. The company believes that its consultancy services could help double this new regional enterprise’s annual revenues within three years.
AMAN Insurance has been proactive in expanding the Gulf’s insurance capacity. Last month, the firm announced a partnership ICICI Lombard General Insurance to develop suitable coverage options for the substantial non-resident Indian (NRI) population now living and working in the UAE and across the MENA region. As citizenship and permanent residency are not often granted to immigrants in these countries however, maintaining affordable access to necessary services like healthcare remains an issue for many non-resident immigrants.
Speaking on the launch of their joint venture with AMAN, Mike Collier, Chief Executive of Agility GHS, explained that despite the current political unrest spreading through the Middle East, the region was prosperous and the desire of its citizens to improve their health outcomes and general lifestyle remained.
“We are going there because there is market growth but they are relatively inexperienced in managing health risk. In Dubai, one in five adults is diabetic, that is 20 percent of the population, we need to look at how do we keep the people healthy,” Collier remarked.
Collier further argued that the recent moves in the GCC to instigate national health insurance reforms would need the private sector’s resources and expertise to achieve its lofty targets. “There is legislation being pushed to introduce mandatory private healthcare insurance for everyone. Health care will still be free because contribution will be underwritten by government, but it is being pushed through private providers,” he said.
Amity Health began operations last December. To date, the company has developed a network of over 800 service providers. Amity also holds contracts with 45 large employer groups and are projected to cover over 30 thousand people throughout the Gulf by the end of the year.
Now with Agility GHS’ involvement, the Amity Health portfolio could expand rapidly and within three years would be expected to provide coverage for more than 1 million GCC citizens. Introducing comprehensive medical savings accounts and wellness programs in the region will help encourage Amity Health members to stay healthy, remain lifetime policyholders and ultimately draw further business.
Collier further explained that ensuring positive health outcomes had not been a focus for the insurance market previously in the region, and companies had suffered as a result. “At the moment, there is no relationship between wellness and insurance and I think the market is prime for that. All the insurers who offered risk have been burnt because they did not structure the products accordingly,” he said.
Agility GHS first became involved in the Middle Eastern market in 2006. The company started off offering technology and outsourcing solutions to regional health insurers and assisted in managing certain risks for their health portfolios. Agility GHS entered Australia in 2004, providing similar IT services for healthcare financiers, and have since also moved into Hong Kong, Pakistan, Nigeria and India.
“Throughout Africa, people want better health. We have a plan for Hong Kong and we are working on a strategy for Pakistan ahead of India. Our partners in Dubai are talking about Turkey,” Collier added.
Agility GHS now plan to use the Dubai office as a central hub to further extend its international operations. From here on out, the company would prefer expansion through the joint venture model and working with local partners. Agility GHS are looking for similar AMAN-Agility partnership agreements in countries it currently is operating in as well.
Agility GHS’s recent international expansion efforts have been driven by their home market, South Africa’s, protracted discussion about and implementation of a universal health insurance system, The National Health Insurance (NHI), in 2012. The company currently employs 300 people in South Africa and administers Resolution Health, an open health scheme that covers over 140 thousand lives. The influx of thousands of previously-uninsured customers into Agility’s local health network could overwhelm both institutional capacity and the cost-effectiveness of the company.
In his closing remarks, Collier confirmed that the NHI posed unpredictable risks to their operating model within the country and Agility GHS needed to enter new markets to ensure their long-term solvency.
“The NHI has simply accelerated the need to mitigate the risk. We endorse the idea of better access and better health care for everyone but we can’t predict what the NHI will mean for our business,” he concluded.
Insurance Companies Mentioned
Agility Global Health Solutions
Agility is a leading consultancy firm, providing information systems and outsourcing solutions for insurance companies, medical schemes and government organizations around the world. Agility’s solutions are individually managed to meet a client’s strategic goals and to enable them to benefit from the advanced use of technology. Since 1994, Agility has offered compelling business value propositions for its clients.
AMAN
Dubai Islamic Insurance & Reinsurance Company (AMAN) was founded in 2002 as a national public shareholders company focused on Islamic insurance in the UAE. Aman’s founding members included the Dubai Islamic Bank and The Dubai Group among other shareholders. The Company offers general insurance products, including engineering, general accident, fire, marine, and motor insurance products. Aman can also provide life and health takaful insurance products for individuals, groups, and corporate clients, as well as healthcare insurance products, investment securities and property services.
May
18
New Insurance Products Launched for Non-Resident Indians in Emirates
Filed Under UAE Insurance | 6 Comments
Last week, the Dubai Islamic Insurance & Reinsurance Co. (also known as AMAN) announced the launch of two new medical coverage products in the UAE market through a partnership with ICICI Lombard General Insurance, the largest private sector general insurance company in India, and additional input from insurance and reinsurance broker J.B.Boda & Co. The partnership will see further collaborative insurance products developed for the Gulf market. The deal was formalized by Hussein Al Meeza, Chief Executive and Managing Director of Aman, and Hitesh Kotak, the Vice President of ICICI’s Strategic Planning Group.
The two new insurance products introduced were Rishtey (which means ‘relationships’ in Hindi) and Health on Return. These products were designed to better provide suitable coverage options for the substantial non-resident Indian (NRI) population now living and working in the UAE and across the MENA region.
Hitesh Kotak explained: “The products are aimed at Non-Resident Indians in the UAE and the region, in order to better cater to their health needs, and needs of their families back home.”
The Indian Diaspora makes up a considerable proportion of the working class in the Middle East. Many have moved, in particular, to the rich Gulf States since the oil boom to work as laborers, in clerical roles, and as well as in more specialized fields. The MENA region has presented an attractive opportunity for South Asian migrant labor due to the higher incomes available as well as the relative geographical proximity to India. In 2005, almost 40 percent of the population in the United Arab Emirates was estimated to be of Indian descent. As citizenship and permanent residency are not often granted to immigrants in these countries however, maintaining affordable access to necessary services like healthcare remains an issue for many non-resident immigrants.
These developments follow renewed efforts by India’s insurance regulator (IRDA) to liberalize the domestic insurance market and enable the rising middle-class Indian consumer to make more proactive choices with regard to health coverage options. From July 1st 2011, health insurance policy holders in India will be able to change insurance providers without fear of losing their benefits from their previous policy. ICICI Lombard have been proactive in expanding their services to meet this upcoming regulatory shift, including a recent partnership with Air India Express, which will provide exclusive travel insurance solutions towards international, domestic and student travelers.
According to ICICI Lombard, the new Rishtey policy will offer foreign workers in the Emirates comprehensive health insurance for their families back in India. The plan features an assortment of supplementary benefit options, such as medical travel and emergency evacuation compensation, all made available through a straightforward service structure with uncomplicated documentation for customers. The Heath on Return insurance service meanwhile will cover NRI health needs when they go back on leave to India. The product will also serve as a retirement health insurance package for when foreign workers ultimately decide to move home permanently.
Hussein Al Meeza confirmed that non-resident Indians in the Gulf would prove to be an important market to capitalize on in the Gulf: “The NRI segment of the market is increasing in volume. At the same time, there is greater awareness of the benefits of health insurance and the importance of planning ahead. We foresee these products doing exceptionally well in regional markets,” he said.
The collaboration between Aman and ICICI Lombard comes on the back of a successful year for the UAE insurer, one which has seen them improve market share and generate consistent earnings. Aman’s most recent company filings reveal a 32 percent increase in profits in the fourth quarter of 2010, with revenues topping AED157.9 million (US$43 million).
The insurer was also the recipient of the World Finance award for the Best Takaful Provider for 2011. Takaful, or Shariah-compliant, insurance products are one of the fastest growing insurance sectors in the world, particularly in the rising middle eastern and Indian subcontinent economies.
Aman Chief Executive Al Meeza concluded the event, restating the company’s intentions to continue developing its insurance services to meet the plurality of different clients in the region. “Aman is consistently looking for ways to improve its presence across various sectors, and diversifying its product portfolio. We are constantly revamping our products and offerings to ensure we can predict and cater to customer needs. Our partnership with ICICI Lombard will help ensure that we continue to offer innovative products that benefit our clients,” Al Meeza finished.
Insurance Companies Mentioned
AMAN
Dubai Islamic Insurance & Reinsurance Company (AMAN) was founded in 2002 as a national public shareholders company focused on Islamic insurance in the UAE. Aman’s founding members included the Dubai Islamic Bank and The Dubai Group among other shareholders. The Company offers general insurance products, including engineering, general accident, fire, marine, and motor insurance products. Aman can also provide life and health takaful insurance products for individuals, groups, and corporate clients, as well as healthcare insurance products, investment securities and property services.
ICICI Lombard
Founded in 2001, ICICI Lombard is a 74:26 joint venture between ICICI Bank Limited, India’s second largest bank, and Fairfax Financial Holdings Limited, a Canada based financial services company. ICICI Lombard is a general insurance company offering a wide range of insurance policies including, business, liability, motor, travel, rural and health insurance products.
May
3
New Health Screening Requirements for Expats in UAE
Filed Under Expat Insurance, International Healthcare, UAE Insurance, Uncategorized | 3 Comments
Last Sunday, the UAE ‘s Ministerial Service Council, chaired by Shaikh Mansour Bin Zayed Al Nahyan, the Deputy Prime Minister and Minister of Presidential Affairs, announced that expatriate workers who want to work in the UAE must get medical tests done in both their home countries and in the UAE prior to receiving a work visa for the emirate.
Many expatriate workers try to cheat the system by providing a fake medical test result from their home country. The new system will curb the number of workers, who slip into the UAE work force with fake certificates, by mandating re-tests once the workers arrive in the UAE.
The Ministerial Service Council has ordered the Ministry of Health to prepare and implement the legislations necessary to put the new system into effect. Expatriate workers, who bring communicable diseases into the UAE, have been a long-term issue for the council.
Another challenge that the council fights in preventing expatriate workers with communicable diseases from entering the country is internal corruption. Recently eight people, an Emirati health official, her uncle, and six others, were accused of accepting bribes and forging health certificates for individuals with infectious diseases.
The 25-year old Emirati woman, who worked for the Dubai Health Authority (DHA), is charged with accepting 30,000 Dhs ($8,167 USD) in bribe from her 42-year old Indian uncle to forge and issue health certificates to expatriate workers who have communicable diseases.
The uncle owns a typing center, which he is accused of working out of to distribute clean medical certificates to people with infectious diseases, ranging from hepatitis to Acquired Immuno-Deficiency Syndrome (AIDS). Prosecutors claimed that the 25-year old niece would abuse her authority and position to stamp certificates with a free-of-communicable-diseases stamp during her night shift.
Another two DHA clerks, a 28-year old Iranian and a 30-year old Indian, are also charged for accepting 45,000 Dhs ($12,251 USD) from four Pakistani workers to forge similar health certificates.
As of Monday, the Emirati woman has pleaded not guilty before the Dubai Court of First Instance. Her uncle also pleaded not guilty as he defended himself in the courtroom, which was presided by Judge Hamad Abdul Latif Abdul Jaward.
The 28-year old Iranian, 30-year old Indian, and one of the four Pakistani workers have too pleaded not guilty, while the other three Pakistani workers were not present for Monday’s trial.
An Emirati second lieutenant testified that the Dubai Police’s CID was informed that an Asian suspect was responsible for forging health certificates at one of the DHA’s fitness centers. He also notes, “We arrested the uncle who ran a typing center. During interrogation, he admitted that he collected from one of the Pakistani workers applications for individuals with infectious diseases and needed to renew their residence permits or have one issued.” The lieutenant also claimed that the uncle would charge around 500 Dhs to 1,000 Dhs ($136 to $272 USD) per application.
He goes on to say, “We detained one of the Pakistani individuals, who immediately admitted the two clerks, who worked in fitness centers, used to issue for him the forged certificates.”
Prosecution records showed that the confession was confirmed by another one of the Pakistani workers after he was arrested.
Although the new system cannot prevent DHA health officials from forging health certificates, it can deter expatriate workers who have infectious diseases from coming into the country with false test results and help relieve the pressure on the UAE healthcare system.
Any expatriate who wishes to work and live in the UAE is required to get a health check to see if he or she has HIV/AIDS, syphilis, or pulmonary TB. Housemaids and nannies will also be subjected to a pregnancy test, while kindergarten school employees, barber shop, health club, and restaurant workers will also have to test for hepatitis B.
The Ministerial Service Council hopes that the new system will lessen the stress and expenses on the UAE healthcare system, which has to treat all patients with communicable diseases before deporting them. 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. DHA clinics have been so busy recently that some have suffered a breakdown in services.
May
3
Many Expat Residents No Longer Able to Afford Rising Healthcare Costs in Dubai
Filed Under Expat Insurance, Health Insurance, Healthcare, Medical Insurance, Middle East, UAE Insurance | 5 Comments
In Dubai, public healthcare costs are rising at a significant rate, which has become a major concern for expatriates, especially those without private health insurance.
Dubai residents 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 essentially offer no discounts now. Treatment costs in government hospitals are now about the same as those of private hospitals, with a consultation costing around 250 Dhs to 400 Dhs (US$ 75 to US$ 120), and a one night stay in the Intensive Care Unit costing around 3100 Dhs (US$ 845).
There has been discussion of passing a legislation that would make health insurance mandatory for all expatriate employees that would be paid for partially by their employers. Abu Dhabi currently already has a similar law in place, which has led to around 98 percent of workers being insured. However, after years of talks in Dubai, expat residents are still waiting to see whether a mandatory health insurance scheme materializes.
To exacerbate the situation, the Dubai Health Authority (DHA) has recently announced that they will start charging expatriate patients for chemotherapy sessions. This announcement was made 2 weeks ago, and is due to be in effect in 1 week.
A staff from the Oncology Department of Dubai Hospital announced, “From May 3rd, patients will have to pay for their chemotherapy injections, the cost of which will depend on the medications.”
The vast majority of expat residents will not be able to afford these costs out-of-pocket. One session of chemotherapy can cost around 8000 Dhs (US$ 2,177), and around 14 – 16 treatments are needed in one year.
Many physicians, authorities, and patients have criticized the DHA for the short notice that it gave patients, and the lack of consideration for patients who have already begun a course of treatment and cannot afford to stop.
For many expat patients, they cannot wait to go back to their home country to seek treatment because it may take a while for the paperwork to be processed before they can start receiving treatment. The delay in treatment can drastically change the outcome of their recovery. It is also too late for these expat cancer patients to apply for and get private health insurance because no private insurer will agree to cover cancer treatment costs once the patient already has cancer.
Other costs, aside from chemotherapy, are also on the rise. Expats, B. Joseph and his wife, had a baby in Dubai in 2000, said, “We paid just Dh 100 for the delivery then. The health card is of no use now” Eleven years later, they have to pay 12,000 Dhs (US$ 3,266) for the same delivery package.
A DHA representative stated, “The card has no specific benefits. It only gives you access to government hospitals and clinics.”
Currently, treatment is still free for Emirati nationals. Emergency treatment for expats is also free until the patient’s condition stabilizes. At that point, they will be billed for all other treatment received outside of the emergency ward.
For example, an Arab woman, who was stabbed during a robbery, was billed 285,000 Dhs (US$ 77,589) for her treatment costs after her situation stabilized. She cannot afford the bill, and felt that the burden of the bill should not be on her. She complained to the Dubai Police Chief Lieutenant General Dahi Khalfan Tamin, and has started a discussion in the Emirate about who should be responsible for treatment costs for crime and traffic accident victims.
The DHA has responded to criticisms of cost cutting measures and rising costs by saying, “As a vital service provider, we take into account ethical and moral requirements. We are always aware that the field involves the life and death of patients and keep in mind the oath all doctors have taken – to treat all patients no matter what race, religion, or social standing – leading to the fact that all patients coming to the hospitals, especially emergency cases, need to be treated immediately regardless of their capability of paying or not. However, taking into account the rapid increase in the population of Dubai and the spiraling costs in running health organizations, there should be a mechanism in place to at least cover the costs of such services.”
He goes on to add, “We believe that most of the issues, if not all, will be resolved with the introduction of a universal mandatory health insurance scheme, whereby every resident of Dubai is covered for certain health services. Dubai is moving forward in that direction.”
However, many Dubai expat residents are skeptical about whether the scheme will ever come into effect. The DHA has said in the past that the scheme was originally to be introduced in January 2009.
According to a month-long Dubai Household Health Survey performed by the DHA, 75 percent of workers in Dubai have no health insurance. This creates a chain of consequences that results in reduced interest and investment in Dubai healthcare services as well as escalating bills.
Dr. Haider Al Yousuf, Director of Health Funding at the DHA said, “Limited access reduces utilization; this does not provide enough volume to maintain a high quality of services provided, allow specialized centers of excellence nor promote medical tourism.”
Ram Lachhan Raj, a laundry worker, ran up a bill of 44,000 Dhs (US$ 11,978) in one week after he was diagnosed with leukemia and renal failure. Neither him nor his employer can afford the costs.
“As good residents, we would like to pay, but just cannot afford it,” said Somsun S, a small business owner, who is left with a bill of 45,000 Dhs (US$ 12,250), after an employee was paralyzed after a fall.
In the past, hospitals have been understanding and have waived the bills for many people. NGOs and other organizations have contributed to treatment costs, but this solution is no longer sustainable as the amounts involved have become much too high.
Patients and hospitals are also trying to organize charity drives by holding garage sales and markets to raise money for patients who cannot afford the costs, but many experts believe that the only permanent solution is mandatory insurance.
Others have pointed out that it is not as simple as passing a law that makes health insurance mandatory. Albert Rodrigues, the Managing Director of Millenium Insurance Brokers noted, “It is not easy. The challenge for the health authorities is to find the right formula that would satisfy all the stakeholders – medical providers, employers, insurance companies, and the general public who include both Emiratis and expatriates. Most employers do not have the margins to cater to the new equipment”
Deteriorating economic conditions are another contributing factor to the delay in implementing the mandatory health insurance scheme. Sanjay Tolani, Director of Goodwill Insurance Brokers expressed, “After the financial crisis, some multinationals have sized down employee covers, while others have begun to share premium costs with the employees.” Tolani also said that to compromise, many large employers have opted for Health Management Offices (HMOS), where employees can have discounts at a network of predetermined clinics and doctors.
Until employers, health authorities, and insurance companies reach a deal, the situation continues to worsen with hospital bills continuing to escalate.
According to the World Health Organization (WHO), the UAE expenditure on health per capita is 3,607 Dhs (US$ 982). Comparatively, this is much lower than many Western countries. However, since the UAE is a tax-free country, medical care costs are becoming more difficult for the government to carry entirely on their own.
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