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 line differs from person to person according to our individual needs, knowledge and budget.
For those of us engaged in the industry, the period post-pandemic has been particularly interesting. The emergence from the chrysalis of COVID-19 has seen a real shift in the health insurance market in Dubai, with buyers and insurers alike demonstrating different behaviours and approaches than before.
At InsuranceMarket.ae we’ve been studying the situation for some time, and discovered some interesting emerging trends.
Like most products, insurance is hugely influenced by psychology. Covid-consumerism has meant that buyers are now much more aware of the availability of insurance and assurance products and as such, have become more sophisticated in their buying style.
Consumers see the value of health insurance like never before, either through first-hand utilisation or media storyboarding. It’s now not about compliance and covering the essentials but ensuring every eventuality is insured.
Consumers have realised that covering themselves and their families is a cost worth the expense and are making heath a priority purchase. Sales are more specific: be it medical condition, treatment, or providers, it’s all tailor-made. And there are calls to link health insurance policy periods to residency visas too - two-year policies for example.
Personal and commercial buyers alike are looking beyond the basic, seeking additional services such as direct access to specialists, better networks (in terms of coverage, convenience, claims support), and holistic services (such as employee welfare, stress/weight management, discounted fitness memberships, and preferential rates on health aids and devices).
Ensuring their future
The shift in insurer behaviour is also interesting. Keen to manage the myth that they lack proactivity, insurers have invested in innovation. They have provided portals and online processes that allowed customers to purchase remotely, manage their data digitally and speed up service and support.
Those companies in it for the long haul, showed they were here to stay by looking for smart strategic partnerships with others. Profitability became an increasingly important issue, especially since the lower rung basic end plans have a tendency to ‘burn’, with costs/volume of claims versus low premiums. Consequently, higher cost service providers are being removed from insurer panels, and
there is a growing emphasis on bottom-line business plans as opposed to the more transactional top-line approach. Underwriting of group medical plans has also seen somewhat of a shift towards greater underwriting at member, rather than ‘pool’ (consolidated average rate), level.
Increasing fraud has driven a need to validate information against databases and public records, with any applications or claims containing misleading, non-disclosed or falsified information being rejected. Insurers are also being tougher with their TPAs (Third-Party Administrators) who, in the face of an active acquisitions and mergers landscape, are more consolidated than before.
Put simply, many insurers are using the same service providers and thus looking for differentiators like turnaround times. This is putting TPAs under pressure to deliver like never before.
Brokers are back
Despite the developing digital backdrop, aggregators are not in the ascendency and whilst still having a place in the retail basic plan market, their levels of market penetration are limited. Similarly, other distribution channels such as online direct and bancassurance are also not seen as a threat to the buoyant broker position.
As the permutations in products increases, so do the need to de-mystify the market, clarify the covers and provide security and stability. That’s the value of a good broker – he or she is not only a good source of products but of information too. And are here for the long-haul.