UAE | Health

UAE insurance firms are 'not investment companies'

Fierce competition is expected among insurance companies following the National Health Insurance Company's (Daman) recent decision to give up its exclusivity of the governmental sector.

  • By Dina El Shammaa, Staff Reporter
  • Published: 23:36 June 9, 2008
  • Gulf News

Abu Dhabi: Fierce competition is expected among insurance companies following the National Health Insurance Company's (Daman) recent decision to give up its exclusivity of the governmental sector.

Various governmental institutions will now be able to select a health insurance plan from 26 registered insurance companies for providing employees with health insurance in direct competition with Daman.

Speaking to the media on Monday, Daman's Chief Executive Officer, Dr Michael Bitzer expressed his concern towards benefiting the end user and advised insurance companies not to depend on profit- making from investment claims and to focus on their core business instead.

"There is a valid risk that some inexperienced competitors would enter the market with insufficient low premium level which does not cover the medical expenses and is a risk for providers as well as policy holders, this can only hurt the market. We trust that the consumer will look for the sustainability and effectiveness that our products offer," said Bitzer.

He also confirmed that Daman still has exclusive rights to the government-backed Basic Plan to employees in both the public and private sector as well as direct billing with public providers.

This decision was taken after careful consideration by the Health Authority Abu Dhabi (HAAD), members of the board and the management team in Daman, in an attempt to open and strengthen the health insurance market in Abu Dhabi.

"The health insurance business is a difficult one and insurance companies need to have the know how experience to forecast insurance claims. Insurance companies should realise that they are not investment companies. A smart health insurance company should be able to predict future profits and keep up with the inflow of bills coming in from health providers," advised Bitzer.

Bitzer told Gulf News that the health insurance players should focus their profit on their technical services, which he said, is part of an insurance company's core business, what he called a "premium minus claims equation."

To date, Daman has managed to insure 300,000 members in its enhanced plans of which 90,000 are employees from the government sector and 210,000 come from the private sector.

Their next step is to focus on expanding their health insurance services to residents in Dubai and expect a 30 per cent increase of insured members from other emirates.

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