Healthcare premiums get costlier

As compensation claims jumped to 78.2 per cent of the overall premium paid last year and insurance companies in UAE paid a whopping Dh3.612 billion in compensation against Dhs4.622 billion of the total premiums earned, health insurance companies are now all set to increase premiums drastically. Dr. Hazim Al Madhy Executive Vice President and Director of Medical Insurance department at Oman Insurance Company said that ‘profit margins of most insurance firms are not more than 5 per cent and this could be attributed to at least 20 per cent additional costs to the total compensation paid by insurance companies’. He attributed the rise in compensation and shrinking profit margin to the high cost of health care products and services over the past year, as well as the misuse of high indicators of service and exploitation. “There is a rising abuse of the system, it turns out that about 70% of laboratory tests and analysis was not needed.” The expenditure of the insurance firms is not limited to the payment of claims, they also have to pay up to 20 per cent of the policy price to brokers and add to this our operating cost, then we are left only with peanuts. An insurance insider said, “Abdul Latif Abu Qoura General Manager of Dubai Insurance urged the Ministry of Health to issue proper directives as regards the wages and cost of health services. “A rise in the prices of insurance policies is not in the interest of the consumers, hence the ministry should step in and contain rising cost.” The total of the underwriting premiums for life assurance and formation of funds operations amounted to Dh4 billion.