Dubai: Vaccinations are putting a tight leash on the COVID-19 spread – but the legacy of the pandemic will be there on the global insurance industry and the insured for some time. It could mean increased cost of insurance for health insurance in the UAE, according to a top industry figure.
“The pandemic has already impacted [policy] installments and is leading to inflated costs on so many fronts,” said Hamad Abdullah Al Mehyas, CEO of Abu Dhabi’s health insurer Daman, which now extends coverage to more than 2.1 million insured. “There are new medicines that cost in the hundreds of thousands – the cost of medical services will go higher.
“All of which will show up on the medical inflation rates… and reflect on the instalments (a policyholder has to pay).”
Senior insurance industry source echo his views, saying that the true cost of combating COVID-19 will be reflected in the 2021 insurance industry claims. In the UAE, the spiralling costs are still not being felt in full because “All medication for the corona is shouldered by the government,” Al Mehyas added.
At least one factor will remain a constant - medical insurance will remain the fastest growing category this year… and for some time to come.
New Gulf markets?
Daman, which is marking its 15th year of operations, is keeping a lookout for new market entries, with Kuwait and Bahrain mentioned as where “discussions” are taking place. In the UAE, Daman has moved well beyond its Abu Dhabi mandate – “We are having discussions with strategic partners in Dubai and northern emirates,” the CEO added. “In the past, we have insured the whole of government in Sharjah and had a presence in Dubai.”
In Saudi Arabia, it’s already off the mark, with Saudi Enaya. “Any enterprise would want to be in the kingdom given the huge volumes and expected returns,” said Al Mehyas. “There are about 40 companies in this [medical insurance] space, some of them quite specialised. But there are more opportunities that we can bag there.”
In terms of employment for UAE nationals, Daman remains one of the key players in Abu dhabi. “When we launched, we had about 200 employees – now, it’s grown 10 times that,” the CEO said. “We have in these years entered different fields, such as management of medical units. We have shifted from relying only on traditional ways to deliver insurance services to extending them virtually.
“At all points, we have sustained government partnerships and kept growing the [medical] insurance footprint. We have a clear future vision that will see us go outside the borders of the UAE.”
All the while keeping a check on the cost of COVID-19 on insurance…