| 24 Mar 2008 |
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Health insurance on the upswing in UAE
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24 March 2008
Dubai: Health insurance in the UAE is finally witnessing a long-awaited growth spurt thanks to landmark legislative changes.
It is now compulsory that non-Emiratis in the UAE have private health insurance, provided by their employers.
Some experts in the industry expect this new legislation will increase Dubai premiums to Dh1.5 billion and Dh4 billion across the whole country. If this is achieved, it would represent a sweeping 40 per cent increase within the market.
A spokesman for Axa-Gulf Insurance said, "Last year, we saw Dubai's health insurance sector increase 70 per cent because a lot of companies are preparing for this legislation to come into effect. Development is also driving insurance as when you take out a mortgage, you have to take out life insurance too."
With the increasing traffic on the roads and rising accidents, it is not surprising that motor insurance makes up a large part of the total insurance premiums. Local analysts suggest that motor premiums presently stand at around Dh2.2 billion and are increasing at 30 per cent a year.
However, claims are frequent (especially in Dubai) and expensive, which keeps profits low. Official figures show a gross loss of around 70 per cent.
Given the fast-pace of real estate development, insurance sales to construction companies provide a foundation for the sector's growth in Dubai. These include contractor all-risk coverage, machinery insurance, plant coverage, loss of profits and third party liability among others.
In Dubai, a large percentage of all construction insurance premiums are shipped out of the country in the form of reinsurance agreements. This means that the local insurer acts as a sort of broker for large international reinsurance firms.
Reinsurance is s way for companies to reduce risk to themselves.
Vazayil also says that in most contracts there is a mandatory clause in place which protects labourers. This is defined in the Workmen's Compensation Law, part VIII of the UAE federal law.
By Suzanne Fenton
© Gulf News 2008. All rights reserved.
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