International private medical insurance (IPMI) premiums have been increasing in Dubai largely due to higher demand for medical services as the economy returns to life after Covid.
Dubai, a part of the United Arab Emirates (UAE), is already known to have the highest IPMI premiums in the Middle East, according to a Pacifc Prime global survey Cost of International Health Insurance 2023. Signs are that this is likely to remain so in the future.
David Hayes, chief executive officer (CEO) of Pacific Prime Dubai, told Health & Protection: “Much of the IPMI premium increase can be attributed to the post-Covid bounce back.
“Once again, clients are comfortable visiting GPs and clinics in person and are seeking non-essential treatments that may have been deferred in 2020 and 2021.
“Dubai is also experiencing an economic upswing, which has led to an uptick in the cost of living,” he said.
Indeed, the UAE’s gross domestic product (GDP) grew by 7.9% in 2022, according to the Central Bank of the UAE (CBUAE). The economy was forecast to have growth of 3.3% this year and 4.3% in 2024.
But there are other factors driving IPMI premiums in Dubai, including how it handled the pandemic compared to some other regions – especially Asia.
“Asia faced various challenges during the pandemic, resulting in many companies and employees relocating to the UAE, where the restrictions were considered more palatable,” Hayes said.
Hub of choice
“All of these factors have made the UAE the hub of choice for companies to establish or expand their operations.”
The UAE population is comprised of more expats than locals, and has proven to be an attractive destination for professionals from around the globe. With a total population of just under 10 million people, according to the World Bank, Emiratis make up about 11.5% of the population of the UAE, with the remainder being expats.
With a population of about 3.7 million people, Dubai has the largest population in the UAE.
But despite the large population of expatriates, challenges remain for the IPMI industry in Dubai.
“The challenges remain the same every year; over-utilisation and over-prescription, coupled with medical inflation, result in increased costs that are passed on to the insurer and ultimately to the end-user, whether that be companies or client,” Hayes said.
And another issue is the introduction of corporate tax.
“While the corporate tax has been introduced in June, its impact remains to be seen,” he said.
Still, despite the challenges, Hayes pointed out that there are opportunities as well.
Barriers to entry reduced
“Numerous start-up companies in the region have experienced significant growth within a short period of time,” he noted.
“The barriers to entry have also been drastically reduced, making it much easier to set up a business here.”
Medical tourism could be another opportunity for the IPMI industry.
“Dubai is aiming to establish itself as a medical tourist destination, which will help drive the economy forward,” Hayes continued.
“The ever-increasing regulations here only benefit and protect clients, as they force industries to raise their standards.”