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UAE insurers want action on dependents’ health insurance renewals

Authorities in Dubai need to intervene to ensure residents on two-year resident visas are renewing their medical insurance policies.
Since the beginning of the year, multiple sources have told Gulf News that more than 50 per cent of one-year policies have not been renewed. While there are a number of reason for someone not renewing their medical insurance, such as permanently leaving the country, industry insiders say a significant number of residents are going without proper coverage into the second year of their residency permit.

In the UAE, all residents much insurance coverage during their two-year residency term. Mandatory medical coverage for all dependents of a sponsor came into effect in 2017.
But government sources in Dubai have said non-renewals are not proving to be an issue so far, and claims of 50 per cent and more of non-renewals is not the case.
Typically, insurers issue a medical insurance policy to a dependent at the time of visa processing. This policy is valid for a one-year period, at the end of which the insured will need to renew it.

Leading insurers have made representations to local authorities to have a look at non-renewals and prescribe remedial actions.
“Only imposing penalties for non-renewals will ensure residents keep updating their medical policies annually,” said Mustafa Vazayil, Managing Director at Gargash Insurance and a senior member of the Emirates Insurance Association. “The other option would be for a policy to be issued for the entire two-year resident visa period rather than have it renewed annually. It’s a cost burden for the individuals to pay upfront for a two-year term.
“But it’s not for the insurers to push for it — the authorities could take such a decision to ensure the entire population is covered.”
Compulsory medical insurance for all has been one of the most decisive changes Dubai’s health care and insurance sectors have seen. Abu Dhabi has been running its version for some time now, and the chances of the Northern Emirates following suit are rated high.
“Although we do not expect to see any further spikes in premium growth related to medical insurance, since all residents in Abu Dhabi and Dubai have mandatory medical cover now, we may see some growth if medical covers become mandatory in the Northern Emirates,” said Emir Mujkic, Lead Analyst for Insurance, S&P Global Ratings.
The phased roll-out in Dubai over the last three years has had a major say in overall insurance industry fortunes. Among listed insurers, overall revenues rose 16 per cent to Dh22 billion, according to S&P. “The last phase of compulsory medical insurance in Dubai played a significant role in this increase as did the introduction of the Unified Motor Insurance Policy,” said Mujkic.
Vazayil agrees that 2017 was quite a “solid year” for the insurance sector. “Compulsory medical insurance helped with underwriting profitability and was not only contributing to the top-line,” he added.
“But if we have issues such as lapsed policy renewals, it could put a strain on the industry going forward.
“This year, health insurance will see stabilisation after the rapid growth experienced in 2016 and 2017, and especially last year’s. That was principally due to mandated dependent insurance being made compulsory. In the absence of such a boost, this year will relatively flat for the industry.”
But there are still longer term concerns the insurance sector wants to see happen in their health care industry exposures. Topping the list is to bring down needless costs associated with getting treated in the UAE.
“The UAE’s health sector cannot sustain costs if residents have immediate access to specialists and consultants at the first sign of an ailment,” said Vazayil. “The current practice is you can go to any hospital and see a gastro specialist if you want to.
“In all other markets, a GP has to issue a referral before anyone can see a specialist. The GP is effectively the gatekeeper, and we need to see such a mechanism in place in Dubai/UAE. We believe Dubai is considering it.”
Such a transition, if implemented, cannot be done piecemeal. The nature of UAE’s health care sector is that there are more specialists practicing than GPs. Plus, those doctors who have MDs, especially those recruited from overseas, would have added specialisations to their credentials. (One solution would be to allow MBBS holders with 10-year work experiences to be recruited as a GP, according to Vazayil.) “The Dubai Health Authority will have to monitor all changes,” said Vazayil. “In the US, a GP’s success rate with insurers is based on how low he can keep the referrals to specialists.
“If such a gatekeeping practice is introduced here, then Dubai has to have mechanisms in place to ensure a GP cannot delay the referral. There needs to be a standard operating procedure put in place to cover diagnoses, tests, and referrals.
“If reforms are not introduced, medical premium costs are likely to go up soon and be a burden on employers. The UAE health insurance market needs gatekeepers and effective filters — this would effectively bring down medical insurance costs by as much as 25 per cent at today’s costs.”

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