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Dubai's mandatory healthcare law has led to growth in the insurance sector, but firms still see significant untapped potential in a number of markets.

The GCC as a whole has historically learned to deal with low rates of insurance penetration, but recent events have given the sector newfound optimism. The passage of mandatory health insurance laws in Dubai raised coverage rates and dramatically increased the size of the city’s insurance market, producing strong growth numbers in the midst of an oil-induced slowdown. Moving forward, insurance companies will look to take advantage of Dubai’s strong economy and the megaprojects planned for Expo 2020, while expanding coverage options and bringing new policies to the region.


On January 1, 2014, Dubai’s Health Insurance Law went into effect, marking a new era of healthcare coverage in the Emirate. The law called for all Dubai employers to provide health insurance coverage for their employees and implement an integrated health system that seeks to provide options for both businesses and individuals. This means that Dubai’s nearly 3 million citizens now all have access to mandatory healthcare, though the extent of the coverage available varies depending on citizenship status and employment. The rollout took place in phases; in the original law, health insurance became mandatory for companies with more than 1,000 employees after October 31, 2014; companies with 100-999 employees after July 31, 2015; and companies with fewer than 100 employees after June 30, 2016. Noncompliance was to be punished with fines linked with the visa system; Dubai’s Health Authority (DHA) began a new plan in concert with the General Directorate of Residency and Foreign Affairs (GDRFA) that would have the GDRFA check insurance statuswhen renewing or cancelling a visa, with a fine of AED500 for every month the visa holder was insured.

However, the deadline for individual coverage has been pushed back twice as the DHA works with insurance companies to alleviate confusion and ensure that all citizens have the opportunity to choose a plan that is right for them. In June 2016, less than a month before the original deadline for insurance for individuals, the DHA extended the grace period to the end of 2016 in order to generate more time for insurance companies to work with the public to form basic insurance packages. Six months later, a resolution extended the deadline again to March 31, 2017 due to a surge in registrations that left insurance companies struggling to handle all claims and the need for further education on citizens’ obligations to purchase insurance. This resolution also directed insurance companies to cover Sharjah and the Northern Emirates, as previously several companies did not offer coverage plans in these regions. Since many people with Dubai residency visas live in these regions, the lack of healthcare coverage there meant that they were unable to purchase plans that provided coverage. Introducing these new plans should go a ways toward closing the final coverage gap.

Insurance rates have been strong thus far, with reports indicating that 98% of Dubai citizens have health insurance, and DHA officials are optimistic that the remaining 25,000 residents without it will attain coverage in early 2017. The high rates of coverage speak to the general success of the program, but wide-scale implementation has not been without its issues, most of which have been due to the sheer volume of applications companies have had to deal with. Aside from the aforementioned issues with regional coverage, Dubai residents have expressed concerns about a lack of affordable plans for those who do not qualify for the DHA’s Essential Benefits Package (EBP), a minimum level of coverage plan designed for people earning less than USD1,089 per month. Senior citizens and unmarried women, in particular, are two groups that many feel pay unfairly high premiums if their earnings push them outside the EBP range. Still, coverage options have been improving and with 50 companies currently providing coverage, the industry is poised to turn the sudden growth into a lasting industry.


The larger UAE has been experiencing an economic slowdown in recent years due to the drop in oil prices. The UAE’s 29 listed insurance companies reported a profit of USD84.4 million in the first half of 2016, but that figure was distorted by a one-time profit of USD110 million by one company. With that figure removed, the overall profit for the industry was negative USD26.1 million over the same timeframe. The industry has been particularly affected by a number of high-profile fires in the UAE, which have led to massive payouts. A fire at Dubai’s Address Hotel on New Year’s Eve 2015, for example, led to an insurance claim of USD332.2 million. 2015 also saw fires at the Torch Tower in February and the Regal Office Tower in November, leading insurance and government officials to reexamine building codes and urge developers to limit the use of flammable materials like aluminum composite panels. A 2016 investigation by one Dubai newspaper found that most skyscrapers built in the city before 2012 had non-fire-rated exterior panels. However, insurance executives stressed that the fires still remained isolated incidents that had not lead to significantly higher premiums marketwide.

More pressing than the city’s fire issues was the wider economic effects of a fall in oil. While the UAE’s insurance sector saw its gross written premiums rise from USD10 billion in 2015 to USD10.9 billion in 2016, slowdowns across several key markets led to lowered growth and concerns about the future of the sector. Still, there is reason for optimism, in part because Dubai enjoys a more diversified economy than many of its neighbors. In contrast to Saudi Arabia, which saw its medical insurance sector contract after oil sector layoffs, Dubai’s tourism and construction industries provide another source of insurance opportunities for the sector, and the looming number of large-scale construction projects are primed to boost the industry in the years to come. Dubai plans to award more than USD3 billion in construction projects in the run up to Expo 2013, and the long-term effects of this boom should bode well for the insurance sector.


The UAE requires drivers to purchase auto insurance, and the sector has seen continued growth over recent years thanks to Dubai’s development. Premiums rose in late 2016 in what insurance executives said was a necessary step to correct pricing and responding to new tariffs. These new premiums are expected to increase the share of the market beyond its current 40%. Another sector currently with a much smaller size but the potential for growth is home insurance; the aforementioned fire issues have helped raise awareness among Dubai citizens of its importance. One 2016 survey by an Qatari insurance company found that only 9% of UAE residents had home insurance, due in part to almost half of Dubai residents renting their home. With home insurance plans available at USD60 annually, the industry wants to push for increased coverage, establishing a precedent that can hopefully be carried over to other underperforming sectors like and travel insurance.