You may have seen some stories in the local press regarding financial problems at Green Crescent Insurance a provider of medical insurance plan in the UAE, based in Abu Dhabi. Following particularly poor financial performance the company has announced that it would hold a shareholder meeting in either November or December to decide whether to dissolve the company or continue operating on a reduced capital basis. The company has only been trading since 2009, but has posted losses ever year and a loss of Dh13.7 million (US$3.73m) in the first half of 2012.
Speaking to The National newspaper, Fareed Lutfi, the secretary general of Emirates Insurance Association, the body representing the interests of UAE insurers, said “There are too many companies and it’s a cut-throat industry. Many have been selling insurance too cheaply to compete, rather than looking at their bottom line.” The articles goes on to state that ‘Mr Lutfi estimates that global healthcare insurance premiums have been rising by an average of 15 to 20 per cent every year, squeezing margins to 2 to 3 per cent for even well-performing local insurers.’
It is certainly true that the costs of medical insurance rise annually, due to the increasing cost of medical care, but my experience is that in most cases this is by around 10%, not the higher figure claimed. I prefer to use International medical insurance providers who are financially secure and have a history of providing these types of plans as well as being efficient at dealing with claims.
The question now is what does Green Crescent’s announcement mean for their policyholders and other local providers?
Green Crescent is a provider of group medical insurance policies for a minimum of tem members and also offers group life and disability cover. Any company that has arranged cover will need to be aware that their cover may not be renewed at the next anniversary date and may want to start looking at alternatives. Even if the company continues trading, this must have shaken confidence and is a reason to look at alternative providers.
Whilst I do not have any figures, it seem likely that there are other local providers who may have difficulties, and when it comes to insurance companies, there are times when bigger really is better.
There are many insurance companies offering group medical cover in the UAE, but they each have a range of plans, many of which can be tailored to suit the needs of the client. For an HR Manager to find the best plan themselves is almost impossible as well as incredibly time consuming. Far better to use an experienced broker who deals with the providers on a daily basis and can source a plan to suit your requirements and budget.
It can take time to obtain personalised group quotes, whether for a new scheme or to replace existing cover, so it is rarely too early to start exploring the alternatives. Medical cover is perhaps the benefit most valued by employees so it pays to offer a good plan at the right price.
To review your group plan, or look at arranging a new scheme, please contact me on email@example.com