Mandatory health coverage reshapes Dubai's domestic insurance market

The introduction of compulsory health cover in Dubai has been one of the key drivers of demand in the insurance industry in the emirate. The sector is regulated by Dubai Health Authority (DHA), which is working to ensure there is comprehensive cover in place for the 2.46m expatriates who live in the emirate, as well as their dependants and those families with Dubai visas living in other emirates.

Rollout

The health insurance programme is tied to the visas issued to residents, and was rolled out with three deadlines for employers. Businesses with a workforce of more than 1000 people were required to comply by October 2014, while the deadline for companies employing 100-999 workers was July 2015. The cut off for those employing fewer than 100 staff, including domestic servants, was June 2016, though this was extended first to December 2016 and then to March 2017. Fines have been introduced for those failing to provide mandatory cover for residents, with monthly charges of Dh500 ($136) for non-compliant sponsors and employers.

In addition, health coverage became a condition for the renewal of residence visas. Family insurance packages start from Dh650 ($177) and policies for the elderly from Dh2500 ($681) a year. The Essential Benefits Plan ranges from Dh550 ($150) to Dh750 ($204), and is for those with salaries below Dh4000 ($1088) a month. The same Executive Council Resolution that endorsed the mandatory scheme also stipulated that the government of Dubai was responsible for providing health insurance coverage for all UAE citizens resident in the emirate.

Approved Companies

While insurance companies welcomed the introduction of the regulations, less than a fifth of the UAE’s 62 providers were given the right to provide cover by DHA. The 12 approved companies are: Noor Takaful Insurance, Abu Dhabi National Insurance Company, Union Insurance, Axa Gulf Insurance, Ras Al Khaimah Insurance Company, Daman Health Insurance, Oman Insurance Company, Metlife and National General Insurance, Takaful Emarat, Dar Al Takaful, Orient Insurance and Oman Insurance. Five of these 12 are national insurers listed on the Dubai Financial Market.

Coverage

While mandatory insurance is designed to cover those living or working in Dubai as well as their dependants, there have been reports of confusion or unexpected fees for policyholders who live in neighbouring emirates and seek treatment outside Dubai. Data from Dubai Statistics Centre suggests that while the permanent population of the city is just under 2.7m, this can rise to almost 4m each day as workers commute in from the Northern Emirates, meaning a large number of people may find themselves without local access to care.

In April 2017 DHA reported that 4.6m health policies had been issued, up from 1.1m in 2015. The authority also announced plans to introduce a diagnosis-related group model by 2018, to ensure smoother payment of hospital medical bills by insurers while helping to reduce excessive prescription of treatments and tests. The system will be implemented in all Dubai health care facilities by 2020.

Claims

Although some insurers may have been concerned that universal coverage might prompt increased visits to medical facilities by the newly insured, initial premium retention and financial results suggest this has not been the case. “At this stage we can say we have observed that the basic insurance plan has been very profitable for insurers, particularly in the first year, although the level of profitability may change,” Emir Mujkic, associate director at S&P Global Ratings, told OBG.

Visitors

From 2018 onwards all visitors to Dubai will also be required to have health insurance for the emirate from a DHA-approved supplier. Further details of the mechanisms for obtaining approved cover had not been released as of October 2017.