UAE: ‘Underpriced’ health insurance premiums set to rise in 2022, say experts

They claimed that demand for health insurance is strong in the Northern Emirates

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Waheed Abbas

Published: Sat 12 Mar 2022, 8:46 AM

Last updated: Sat 12 Mar 2022, 10:28 PM

Demand for health insurance continues to rise in the UAE after the outbreak of the Covid-19 pandemic. Industry executives expect premiums to rise this year.

They claimed that demand for health insurance is strong in the Northern Emirates which are yet to make it mandatory for residents.

Dr Yasser Khalifa, executive vice president and head of employee benefits, Oman Insurance Co., said there is an increase in awareness and the day-to-day market is getting mature post Covid-19.

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“Individual population who was uninsured or who have not renewed their insurance, have shown interest in buying or renewing it. The market has witnessed growth, especially in the Northern Emirates. Also, Covid-19 has resulted in cover upgrades and we have seen people transitioning from basic to a more comprehensive plan,” he added.

He further elaborated that some clients with a large number of employees have requested to cover the Covid-19 pandemic also in the insurance policies. “During the onset of Covid-19, we had started offering 24x7 teleconsultation service through a preferred partner and we are receiving requests to continue including this service in the plan.”

Khalifa estimates that premium rates are expected to increase from 8 to 10 per cent in 2022.

According to Badri Consultancy, the listed insurance companies in UAE registered an increase of 7 per cent premiums in 2021, rising from Dh24.40 billion in 2020 to Dh26.09 billion last year. As many as 16 out of 29 listed companies exhibited growth last year.

Premiums under-priced

In the UAE, insurance has been categorised into two parts – individuals and companies buying for their employees. Individual plans are predefined products and don’t have the flexibility of changing benefits other than what is offered by the insurer. While group insurance is customised based on clients’ requests.

Sanjeev Anand, general manager of business development at Al Sayegh Insurance Brokers, noted that there is an increase in the demand for health insurance in the UAE due to Covid-19. He also noted that plans to introduce mandatory health insurance in the Northern Emirates are slowly underway.

Anand lauded the UAE government’s proactive approach to reducing stress on individuals to bear the cost of Covid-19 treatment as it’s is covered by all health insurance plans.

“In my view, health insurance premiums in UAE needs correction. Current Premiums are under-priced. The government is exploring the change in a premium chart for basic plans keeping in mind the benefit of the mass population. At the same time promoting a sustainable business model. We have observed double-digit growth in group insurance premiums."

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Waheed Abbas

Published: Sat 12 Mar 2022, 8:46 AM

Last updated: Sat 12 Mar 2022, 10:28 PM

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