Clyde & Co, a leading international law firm in the Middle East, estimates that new compulsory health insurance schemes for expatriates and their dependents could conservatively cost employers up to AED 4 billion across the UAE, and over AED 1.5 billion in Dubai alone, assuming a similar compulsory health insurance scheme to that in Abu Dhabi is introduced in Dubai.
A new scheme was introduced in Abu Dhabi from January 2007. A similar scheme is expected to apply to Dubai and eventually across the UAE. The introduction of the new law comes at a time of real change in the insurance industry in the UAE.
“The expected introduction of the compulsory health insurance scheme in Dubai and elsewhere in the UAE is a positive development for expatriate employees and their dependents, and provides many opportunities for the insurance industry in general. We expect that a new scheme will soon be introduced to Dubai and will conservatively provide up to AED 1.5 billion in additional premiums per year for the insurance industry in the emirate, and up to AED 4 billion across the UAE as it is introduced across the country,” said Wayne Jones, a partner at Clyde & Co in the UAE and an adviser on the development of the Abu Dhabi compulsory health insurance law.
“From a cost perspective, the responsibility appears to rest squarely on the shoulders of the employers – whether it is a big international firm or employers of domestic helpers. The scheme will provide huge boosts for the health insurance industry, which is a key and growing part of the economy of the UAE,” said Mr Jones.
In a commentary on the Abu Dhabi scheme, which Clyde & Co advised on, Mr Jones cautioned that as the scheme is introduced across the country, there is a risk that introducing three different schemes with different requirements for the industry will lead to confusion and additional demands being placed on the medical insurance market.
“What the industry does not need at this stage in its development is a multiplicity of systems each having a range of different requirements for insurers, employers and policyholders which will just confuse the market, potentially adding additional cost burdens onto the providers and, therefore, ultimately to employers,” said Mr Jones.
Clyde & Co is a leading international law firm with over 1,000 employees worldwide. The company has been operating in the Middle East for over 20 years and has over 75 lawyers and paralegals in offices in Dubai and Abu Dhabi in the UAE, and in Doha, Qatar. The firm, which has recently been ranked as the top law firm in the UAE for the third successive year by the international legal directory ‘Legal 500’, has particular strengths in insurance, reinsurance, shipping and transport, aviation, international trade, energy, corporate and commercial, capital markets, banking and finance, Islamic finance, dispute resolution, construction and property, information technology, media and telecoms and employment.
