The sale of medical insurance in the UAE has become quite sophisticated lately
We all know we need insurance, especially when it comes to our health. After all, medical insurance is a mandatory requirement in the UAE. However, the type of insurance policy we buy in this range differs from person to person depending on our needs, knowledge and budget.
For those of us who work in the industry, the post-pandemic period has been particularly interesting. The emergence of the chrysalis of COVID-19 has seen a real shift in the health insurance market in Dubai, with buyers and insurers demonstrating different behaviors and approaches than before.
We at InsuranceMarket.ae have been studying the situation for some time and have discovered some interesting emerging trends.
Like most products, insurance is heavily influenced by psychology. Covid consumerism means that shoppers are now much more aware of the availability of insurance and insurance products and as such have become more sophisticated in their buying style.
Consumers are seeing the value of health insurance like never before, whether through first-hand usage or media storyboarding. It is no longer about complying and covering the essentials, but about ensuring that every eventuality is covered.
Consumers have realized that covering themselves and their families is a worthwhile cost and is making health a priority purchase. Sales are more specific: whether it’s a medical condition, a treatment or providers, everything is tailor-made. And there are calls for also linking health insurance policy periods to residency visas – two-year policies for example.
Personal and commercial buyers are looking beyond the basics, seeking additional services such as direct access to specialists, better networks (in terms of coverage, convenience, claims support) and services holistic (such as employee well-being, stress/weight management, fitness membership discounts and preferred pricing on health aids and devices).
Securing their future
The change in behavior of insurers is also interesting. Anxious to manage the myth of the lack of proactivity, insurers have invested in innovation. They provided online portals and processes that allowed customers to purchase remotely, manage their data digitally, and expedite service and support.
These long-term companies have shown they are here to stay by seeking out smart strategic partnerships with others. Profitability has become an increasingly important issue, especially as lower tier basic end plans tend to ‘burn’, with low cost/loss volume versus low premium. Consequently, the most expensive service providers are removed from the panels of insurers, and
there is a growing emphasis on results-based business plans rather than the more transactional, results-based approach. Underwriting of group medical plans has also seen some shift towards greater underwriting at the member level rather than at the “pool” (average consolidated rate) level.
The increase in fraud has resulted in the need to validate information against databases and public records, with any requests or claims containing misleading, undisclosed or falsified information being rejected. Insurers are also tougher on their TPAs (Third-Party Administrators) who, faced with an active landscape of acquisitions and mergers, are more consolidated than before.
Simply put, many insurers use the same service providers and therefore look for differentiators such as turnaround times. This puts TPAs under pressure to deliver like never before.
Brokers are back
Despite the developing digital landscape, aggregators are not on the rise and although they still have a place in the basic package market, their levels of market penetration are limited. Similarly, other distribution channels such as online direct sales and bancassurance are also not seen as a threat to the dynamic position of brokers.
As product permutations increase, so does the need to demystify the market, clarify coverages, and provide security and stability. This is the value of a good broker – he or she is not only a good source of products but also of information. And are here for the long haul.