Surge in Medical Insurance

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 constitute almost half of the insurance portfolio of 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 sector has been poised for rapid growth and the major growth will be in the area of health insurance since the government has started applying cooperative health insurance scheme to expatriates working in the private sector. This scheme is being applied to expatriate workers and their families in three phases. In the first phase, companies which employ 500 or more employees are obliged to implement the scheme for their expatriate staff. In the second phase, the scheme is applied to expatriate employees in companies employing more than 100 foreigners. In the third phase, it is applied to all companies and all expatriates including domestic servants. Lately, the government has decided that expatriate workers must have health insurance coverage for the application and renewal of their Iqamas (resident permits). This decision has given a fresh boost to the Kingdom's health insurance sector.

The cooperative health insurance scheme was approved by the Council of Ministers in 1999 with the objective of regulating the mandatory medical insurance and to reduce government expenditure in the health sector. The overall average expenditure in the Saudi health sector amounts to SR 37.4 billion per year, of which 29.9 billion is government expenditure and the remaining SR 7.5 billion is accounted for by the private sector.

After implementing the cooperative health insurance scheme, medical insurance premiums is set to grow by at least 40 percent and it is expected that the newly established insurance companies will initially concentrate on health and motor insurance markets to carve out a bigger share.



In Saudi Arabia, medical insurance is being sold for almost over half a century. Until recently, the National Company for Cooperative Insurance (NCCI) had a monopoly in the market procuring a bigger share of the premiums. There were also at least 70 companies active in the market operating through offshore licensing arrangements with foreign companies. Now NCCI would face hard competition since a number of new companies licensed under the Cooperative Insurance Control Regulation has already come up and many more are in the offing. So far, at least new 13 companies have been licensed to operate in the Kingdom.

Medical insurance in the Kingdom is still in evolutionary process and it may take some more time till it stabilizes. In the past, because of the absence of regulatory body, many hospitals and clinics suffered a lot due to the default of some of insurance providers. A number of insurance firms operating in the medical insurance sector were closed down resulting in heavy loss by the hospitals and clinics which were offering medical services under the insurance coverage by these companies. The current regulations will protect the interest of all parties involved in the health insurance sector.

Another major problem facing the hospitals is the evaluation process of claims by the insurance company doctors, who frequently refused to accept claims provided by the hospital doctors. This disagreement between the doctors of hospitals and insurance companies ultimately resulted in the suffering of the patients. The insurance doctors need to trust the hospital doctors for providing better service to patients. The hospital doctors some times end-up being dictated by the insurance doctors which affect their professional efficiency.

There are many companies specializing in the health insurance in Saudi Arabia. For large groups, it is easy to get insurance coverage. However, if an individual wants to buy medical insurance, he is left with very limited choices and always finds it very difficult to get the right coverage. Some of the staff, who are on deputation here have their own international insurance coverage from the companies in their own country. The cost of health insurance coverage is also high. The cost for an individual average coverage ranges from SR 800 to SR 4,500 a year. Inspite of high cost of insurance an individual may not be able to get the coverage as per his requirements.

The mandatory health insurance 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 Ministry of Health, optical and maternity medical facilities. The number of exclusions are less and well defined. The basic room requirement is semi-private room. The difficult area is the deductible amount which is 20% of the claims and is subject to a maximum of SR 100. In this context, customers have ended up paying up to SR 300 due to lack of understanding on various parties involved. However, as the scheme progresses further, the awareness will increase among the customers. Insurance companies have already found a way to overcome this deductible issue by issuing policies with fixed deductible amount. In the mandatory health scheme, there is worldwide exclusion unless the treatment is emergency in nature. Wives and children are included under the current definition of dependents. However parents and other dependents cannot be insured under the scheme.
Most importantly, customers should realize that everything is not insurable and there are always some lacuna in the insurance. Too often, it has been found that a customer either does not get the expected service owing to the fact that doctor does not prescribe the proper medicine needed by the patient since certain brands of drugs are not allowed by some insurance companies. Patients also face problems when they are required to seek approval for even small medical tests which consume much time of the patient and even after a long wait, patients are denied particular tests. The least a customer can do it to become more knowledgeable about his coverage and try to adopt the commercial principle “Caveat Emptor”

Courtesy : 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.

Motor Insurance in Saudi Arabia

Important:
1) The values indicated must represent reasonable market price to ensure satisfactory settlement of claims. Under insurance could result in the vehicle being treated as a constructive total loss even where the claim is relatively small.
2) Under most of the policies legal liability of the passenger is covered under the policy upto a certain limit of passengers.
3) In case of cancellation you need to demand pro-rata refund in case you are leaving the Kingdom.
4) Normally get the quotes from atleast 2-3 reputed Insurers over the telephone or email.
5) Do not handover your keys to any person who is not reliable.
6) After accident Protect your vehicle to safety. Subsequent losses are not covered under the insurance coverage.
7) Deal with professional companies.
Type of Coverages Comprehensive - Specified Risks, Compreshensive All Risks, Third Party fire and Theft and Third Party only. Personal Accident Benefits (unnamed Driver and Passengers – Optional covers)
Coverage Details:(1) Damage to Vehicles:
the reasonable cost of repair, or
the reasonable market value of the vehicle at the time of loss; or
The Estimate of Value as stated in the Policy.
whichever is the least
(2) Liability to Third Parties:
In respect of Bodily Injury - SR. 5,000,000 any one claim
In respect of Property Damage- SR. 5,000,000 any one claim
(3) Towing Charges - SR. 1,000 or 500 or 250
(4) Medical Expenses - SR. 1,000 any one accident
(5) Personal Accident/Medical Benefits- ( SR. 100,000 any one Driver/Passenger)
(6) Agency Repair - In case of Agency repair the rates are higher and deductibles are also higher.
(7) Geographical Extenstion – People want to go to Egypt, Bahrain, UAE, Kuwait,Qatar, Jodran, Yemen etc. It can be done to the own damage section fot the coverage.
Authorised Driver: Any person driving on Insured's order or with their permission.
Deductible: Varies from SR. 250 to SR. 2500.
Vehicles Insured:
Commercial and Private with mild variations. There are also coverage for special type of vehicles.

Basic requirements for Motor Insurance in Saudi Arabia

The following are the basic requirements of Motor Vehicle Insurance in Saudi Arabia

A proposal Form
Copy of Istimara (essentiala)
Copy of Iqama ( not essential)
Vehicle for Inspection ( for individuals )
Payment of premium in advance (for individuals)
Claims experience

For Motor Fleets there is flexibility in requirements. Normally for Fleets the follwoing are the requirements

a list of vehicles with various details like
Make and model of the vehicle
Seating Capacity
Yeat of Make
Estimated value
Claims experience for atleast 3 years


S.A. Khan

Bubbling Controversy

Coverage on "Burqa" seems to have overshadowed the demise of "King of Pop" in Media. It is heartening to see the huge response in the media to the remarks made by the French President, who in his usual ignorance and unbaked curiosity has opened the Pandora's Box. He might have never imagined the reaction to his ignorant remarks from all over the world. For some ignorance is bliss.

The word Burqa is usually used to describe the black outer garment worn by the Muslim women. Burqa, is preferred by many women because it is easy to wear and easy to take-out. It is designed to adhere to the Quranic guideline of coverage for women. However it is preferable to use the word Hijab instead of Burqa. Burqa is one of the Hijaab.

Like most of the controversies and misconceptions related to Islam, which time and again erupt and give a chance to the gullible ignorant to balloon it up further. Islamic dress code is being followed for over 1430 years and it has been prescribed in Quran when it was revealed. Dr. Zakir Nair, one of the famous Indian Islamic Scholar, who is also famous for his verbatim quotations of various World religions, has identified 20 of the most common mis-conceptions among non-Muslims. His presentations on the same and articles has helped many people to over-come their misunderstanding of Islam and appreciate the beauty of Islam. Few years ago he had listed the Burqa related misconception under his list at No.3. He dispels this as follows,
"Misconception # 3: Islam subjugates women in a veil.
Reply: If you look at history, to ancient civilizations, you will find that women were the oppressed people. They had no individual merit. The Babylonians used to punish the woman for her husband's mistakes. The ancient Egyptians did the same. Ancient Arabs buried their newly born daughters.
It was Islam that uplifted the status of women. It gave women rights they never had before. Surah Nissah exhorts believing men to lower their gaze if a lady is passing by. Similarly, there are exhortations for women to lower their gaze if strange men are around. The Quran also speaks about the hijab for men and women to protect the modesty. The hijab for men is to cover their bodies minimally from their navel to the knees. The hijab for women is to cover their whole bodies except for their faces and hands below their wrists. There are descriptions for a female hijab, that it should cover the endowments including head, not be tight, not be transparent, not be like the clothes of non-believers, and not be like the clothes of the other gender, etc. Women got the right to own, inherit property, and to dispose it of at will.
Let me ask you a question: Suppose two identical twin sisters are walking down a street, and one of them is dressed in revealing clothing, while the other one is wearing a hijab. Who will be boys in the street whistle at or tease: the one who is scantily dressed in a mini-skirt, or the one who is modestly attired? The answer is obvious. The hijab is designed to prevent women from being molested. It brings peace to society and prevents mischief. "
All non-Muslims should be given an opportunity to go through these fully listed misconceptions; there will be lesser number of controversies. Media should also take care to highlight these, whenever a similar controversy erupts.
Islam as a religion gave undeniable rights to women. Burqa is not a symbol of imprisonment but it is a symbol of freedom. Burqa, has proven to give women freedom from exploitation, harassment, subjugation and eve teasing. It elevates the women. A vast majority of reverts are women and they have voluntarily adapted to Burqa. The reverts Yvonne Ridley, a former Christian and Kamala Surayya, a former Hindu, both well educated women and have been fully aware of the rights and freedom of women. These women have accepted Islam on a free will and adapted to burqa (veil) voluntarily. No one coerced them to do so. Islam as a religion prescribes dress code to its followers both men and women. The western societies should not imprison women with their views of freedom. The Muslim women should be given a choice of what she wants to wear in a free society.

Mohammed Sadullah Khan