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This is definitely the main factor shaping premiums in Dubai, as plans in the region are legally required to cover all medical conditions, including maternity and pre-existing conditions.
The increasing cost of medical treatments in some of Dubai's most popular healthcare facilities continues to drive up premiums in the region.
The recent introduction of 5% VAT has meant that family plans have become even more expensive. A number of clients are thus either dropping down their benefit levels, or switching to a different insurer to save money.
More and more insurers are offering online doctors consultation benefits, many of which also provide medication delivery services. This is an increasingly popular way to combat rising medical costs in the region.
While there are countless macro and micro factors that influence IPMI premiums globally,
Pacific Prime has identified the following five key global drivers of health insurance premiums:
The growth of the upper-middle class, as well as the population of High Net Worth and Ultra High Net Worth individuals who are willing to travel abroad and pay more for medical treatment, continues to drive the demand for international quality private healthcare. This, in turn, drives up the cost of healthcare, and subsequently the premiums of insurance plans that cover such care.
The cost of healthcare is increasing and has been doing so consistently for many years. The aging population, poor lifestyle habits leading to chronic conditions, and overuse of medical care are among the top reasons for the increase in healthcare costs globally.
Two of the leading regulatory updates that we believe are having the most significant impact on the insurance industry globally are the EU's General Data Protection Regulation (GDPR), and the roll-out of mandatory health insurance in an increasing number of countries.
Health insurance fraud continues to be a major issue for the industry and its consumers. Insurers continue to invest in technology to improve their anti-fraud means, which initially may have an upward impact on premiums as insurers try to offset the investment costs.
The use of big data, artificial intelligence (AI), and the growing importance of telemedicine in a number of key regions contribute to the improvement of administration tasks and claims handling, among other areas, and may potentially result in huge cost savings. This could mean lower premium inflation rates in the future.
97 out of the 100 countries studied in our report have seen an increase in premiums this year, with only 3 countries observing a decrease. Interestingly, Canada is now the second most expensive country for individual and family IPMI plans, replacing Hong Kong for this position. Australia and Singapore also witnessed a relatively large jump in their rankings for both individual and family plans.
When looking at the top 20 most expensive countries for individual and family health insurance, it is immediately clear that countries from the Americas are dominant in both rankings. More specifically, 15 out of the 29 countries featured in the top 20 individual and family IPMI ranking tables are from the Americas. Part of the reason for this is that healthcare costs are notoriously high in certain countries (e.g. the US and Canada), or increasing rapidly (e.g. in Mexico).
Insurers in China have improved their ability to identify and segment high-cost providers, and are thus able to offer much cheaper plans excluding these facilities, leading to insurers better being able to offer attractively priced plans. This partly explains why a number of insurers in China did not apply a rate increase to their plans in 2019; in fact, some even reduced their premiums.
21 African countries saw premium inflation rates of 15% or higher for individual plans, while 10 African countries saw inflation rates of 15% or higher for family plans. Among the factors that contributed to this phenomenon are the increasing cost of claims in the region, as well as a growing middle-class population with higher disposable income.