Historically Insurance
has been in existence for over three centuries in this world. Due to its enormous growth it has been
classified into various classes depending upon the type and nature of the risk
involved. The major traditional classes
of insurances are Medical, Motor, Property & Marine. It is found that Medical together with Motor
forms almost half of the insurance portfolio to the total insurance business.
These classes of insurance are also known as attrition class of business as
losses do occur with regular frequency. Medical insurance is more prone to
attrition than any other class of insurance.
In Saudi Arabia ,
insurance is being sold for almost over half a century. In the recent past Medical insurance was
being written by Medical Insurance companies, General Insurance companies and
Life Insurance companies. There are international
brokers, local brokers and agents also selling medical insurance. Other type of providers have emerged to
manage the bulging Medical portfolios, they are Third Party Administrators and
Consultants. In Saudi Arabia
we have independent TPA and in-house TPA. We also have independent consultant
and some times Brokers take the role of a consultant. But the majority of
Medical Insurance is being done directly by the Insurers.
NCCI was enjoying the
monopoly of being the only registered Insurance Company in Saudi Arabia . But Malath
Co-operative Insurance and Re-insurance has broken the monopoly by become the
first among non-NCCI companies to be registered. However this is a new company
with very little experience in the Insurance Industry. There are many seasoned
companies along with the new entrants awaiting clearance of registration.
The decision of the
government to regularize Insurance companies under SAMA, was a major decision
towards regulation and development of Insurance Industry. The regulation was a comprehensive one
requiring all the players in the market to get the necessary licence to operate
with the minimum fees and deposits. Prior to the current regulation there were
more than 80 insurance companies operating in the Kingdom. However post licencing, these companies will
be reduced to less than half. The remaining either have closed their operations,
will be closing or merged with other companies.
The Motor Insurance was
made Mandatory on 20th November, 2002 fuelling the growth of Motor
Insurance. Council of Co-operative Health Insurance was formed on 11/08/1999 to
regulate the mandatory medical Insurance.
The first phase of health insurance, which was applicable to over 500
expatriate employees was made mandatory last year and the second phase
applicable to over 100 expatriate employees during the early part of April this
year. This has increased the insurance
awareness among the entire community.
Even-though the compulsion is for expatriates only but most of the
companies are including their Saudi staff under Insurance. The over-all Saudi
Insurance market is currently estimated at SR 5 billion. The potential for
health insurance alone is more than SR. 20 billion and is expected to be
achieved within next few years.
In the past many hospitals and clinics
have suffered due to defaulting Insurance Providers. Very recently we have seen
the closure of SACIR and Methaq, who were heavily into Medical Insurance. Millions of riyals were lost by the hospitals
due to unpaid bills by these operators.
The current regulation will protect the interest of all parties involved
in Insurance.
Many hospitals are not happy with
evaluation of claims by the insurance company doctors. These refusal of claims
have become bone of contention between the hospital doctors and insurance
doctors. The Insurance doctors need to trust the prima facie evidence of the
treating doctor. The treating doctors some times end-up being dictated by the
insurance doctors and end up losing their professional independence.
There are many companies specializing
in Medical Health Insurance in Saudi
Arabia .
For groups it is easy to get Insurance. Some of the staff, who are on deputation
basis will have their own international Insurance from the companies in their
own country. However if individual want to buy Medical insurance then he will
have limited choices. The cost of health
insurance hovers between SR. 800 to SR. 4,500.
The main factors built into rating are sum insured, room type, network
of hospitals, dental, pre-existing, repatriation of mortal remains, optical,
maternity, international coverage, age of the insured, deductible, claims
experience and group size etc.
Current basic CCHI coverage is
standardized to make the insurance uniform and it has certain inherent
advantages like compulsory coverage to a limit of SR. 250,000, dental coverage,
vaccinations as per the MOH, optical and maternity. The number of exclusions are less and well
defined. The basic room requirement is
Semi-private room. The difficult area is
the deductible part which is 20% of the claims amount subject to a maximum of
SR. 100. In this area customers have ended
up paying upto SR. 300 due to lack of understanding on various parties
involved. However as the scheme progresses
further, the awareness will increase and there will be less mistakes. Insurance
companies have already found a way to beat this deductible issue by issuing
policies with fixed deductible. The basic intention of the CCHI coverage is to
take care of treatment in Saudi Arabia hence some of the areas on which a
general expatriate patient rely are not covered under the current wording of
CCHI. There is non-network Saudi Arabia
and world-wide exclusion unless the treatment is Emergency in nature. Medical
Insurance is still in evolutionary process and it may take some more time till
it stabilizes.
On part of customer, they should realize that everything is not insurable
and there are always some gaps in the insurance. Too often it has been found that the customer
either does not get the expected service, receptionist is slow, doctor is late
or does not prescribe the medicine suggested by the patient and the blame goes
to the Insurance Company. In certain
cases genuine problems are faced by the customers. Certain companies try to seek approval for
even small test which will consume the time of the patient and even after
wasting the time the net result will be the denial of that particular test.
Certain brands of drugs are not allowed by some Insurance companies, hence they
suggest the treating doctor to provide with generic names of the drugs. These generic names of the drug will give
leeway for the Pharmacist to give the drug of his choice or the synonymous drug
of cheaper variety, thereby causing dissatisfaction to the customer.
Apart from the factors mentioned above, the buyer should look into the
strength of the company, its affiliation, flexibility and its payment record
with the hospitals. Buyer should also be
aware of any fine prints, inner limits, geographical scope, non-network
coverage, limitation of claim submission, general exclusions and practical
difficulties before making any decision to go ahead with a particular policy. A
24 hour helpline is certainly a useful aspect of service by Medical insurer and
should not be over-looked. As with all the buying processes the universal truth
"Caveat Emptor" should not be ignored.
Mr Mohammed Sadullah Khan, an MBA, Fellow of Insurance
Institute of India and an Associate of Chartered Insurance Institute of U.K.,
with more than 20 years of experience in the insurance industry — 12 of which
have been in Saudi Arabia, is experienced in all classes of general insurance
with special emphasis on property, medical, motor and bancassurance. He can be
contacted at mosakhan40@yahoo.com