Trends and challenges for UAE's health insurance industry in 2024: Gargash Insurance

Inclusion of mental health, preventive care are among the other trends likely to dominate the industry in 2024

Medical inflation has been a defining feature in the health insurance industry over the last couple of years and is likely to dominate conversations in 2024 as employers renew medical contracts for employees, said Rajendran Murkkoth, Deputy Managing Director at Gargash Insurance.

"Medical insurance premiums for employees constitute a significant financial outlay for any corporation. Hence, the rising cost of medical care has become a major concern for corporations and SMEs. Some employers are forced to reevaluate the benefits extended to their employees through corporate covers. In 2024, it would be imperative for employers to monitor claims experience over time, understand plan features important to their workforce, and create an intentional strategic plan to manage costs over the long term," he said.

Needless to say, cost containment will be the fine balancing act for employers and healthcare insurers next year, not just in the UAE but globally. According to a recent study by Mercer, more than two dozen countries are forecasted to see double-digit rate increases on average over 2022, 2023, and 2024 for employer-sponsored health insurance. The study surveyed 223 insurers across 58 countries.

The actual medical trend rate in the UAE in 2022 stood at 10 per cent against the general inflation rate of 4.5 per cent. In 2023, this rate is forecasted at 12.5 per cent and is expected to lower down to 11 per cent, which is lower than the global average, according to the Getting the Right Balance between Managing Costs and Meeting Employee Needs report.

In the case of the Middle East and Africa, 57 per cent of the insurance companies surveyed plan to reduce coverage to manage costs, while the remaining would explore making plan improvements to help address attraction, retention, and engagement.

On the brighter side, a number of insurers in the UAE are open to widening the scope of insurance coverage to include mental well-being and learning issues related to children, teenagers, and families. "Many insurers are willing to extend coverage in these areas after actuarially pricing it and building it into the premium. The challenge is to achieve a balance that is beneficial to both the insured and the insurer. Once the current payer/payee relationship changes into a more partnership-based approach, greater implementation can be expected," noted Murkkoth.

Another significant trend likely to dominate the medical insurance industry in 2024 is the importance given to preventive measures. "Insurance companies in the UAE are moving away from being just passive administrators or payers of claims and becoming well-being partners of the insured," says Murkkoth.

"A whole suite of initiatives has been launched by insurance companies in the years following the pandemic, and we expect this to continue. We have noticed increasing acceptance and use of wearable technology, health gaming apps, telemedicine, remote testing, etc."

Health insurance firms are also running training and familiarising programs to educate insured members on both better health management and optimum ways to utilise the new offerings.

Gargash Insurance has been in operation for almost three decades and has emerged as one of the leading insurance intermediaries in the UAE. It offers insurance broking and risk management services to large corporate, small and medium enterprises, and individuals, through its offline and digital channels.

"At Gargash, we have built up a lot of core competencies on managing health insurance for large corporates, SMEs as well as individuals. We enjoy a sizable share of the market because of our strong focus on service and commitment to our customers, many of whom have been with us for decades."