Health insurance continues to dominate the United Arab Emirates (UAE) insurance market, with health insurance accounting for 45% of total premiums in the general insurance market. At present, health insurance is compulsory for residents and citizens in the Emirates of in Abu Dhabi and Dubai. Sharjah is also planning on introducing a compulsory health insurance scheme in the near future, although further detail in this respect is not yet publically available. Abu Dhabi had introduced mandatory health insurance for all residents in 2012 and Dubai introduced its mandatory health insurance scheme in 2014. The Dubai health insurance scheme requires employers to obtain health cover for their employees and was implemented in phases as follows:

  • Companies with more than 1,000 employees: from October 31, 2014.
  • Companies with 100-999 employees: from July 31, 2015.
  • Companies with less than 100 employees: from June 30, 2016.

Further, individuals are required to obtain health insurance for their dependents, including domestic workers, by 30 June 2016. The mandatory policy provides for a basic level of cover, and employers and individuals may obtain “enhanced” cover which is over and above the minimum basic coverage prescribed by law. To ensure compliance with the health insurance requirements, the issuance and renewal of an employee’s visa will be subject to the employee having health insurance in place.

At the recent Emirates Insurance Association 2016 Health Insurance conference, attended by major industry players and representatives from the regulatory authorities, the following key challenges faced by UAE health insurers were raised:

  • Abuse or unnecessary use of health insurance services, including in particular the over-prescription of antibiotics and unnecessary caesarean sections.
  • Over-reliance on brand name medication over generic medication. By way of comparison, it was reported that in the UAE only 10% of prescriptions are for generic medication, compared to over 80% in the United States and the United Kingdom.
  • Severe competition and price-cutting by insurers, together with lower oil prices and returns on investments have greatly reduced the profitability of health insurers in the region.

The Dubai Health Authority and the Health Authority of Abu Dhabi noted that they are reviewing the regulations in relation to health insurance premiums and will be introducing more detailed regulations in this respect in the near future. Further, the Dubai Health Authority will be undertaking reviews of data provided by insurers and service providers and will be undertaking investigations into any suspected abuse or fraudulent activities.

Ms Nabila Taha, Managing Director and Chief Actuary of Taha Actuaries & Consultants, noted that the UAE Insurance Authority’s new Financial Regulations, aim to address the issue of price undercutting by requiring all insurers to appoint an actuary to provide certification of an insurer’s technical reserves and solvency capital. The Financial Regulations also require that an actuary provide the Insurance Authority with an annual report that presents the immediate or future risks facing the insurer. Difficulty in complying with the new financial and solvency requirements are expected to force smaller insurers in the UAE market to consolidate over the next few years.