This article was written exclusively for Expat Network by Pacific Prime Dubai
How are insurance premiums calculated?
When it comes to individual insurance policies, the premiums are generally calculated on two things: the personal information of the person to be insured and the general risk analysis for an insurance provider’s total membership (sometimes categorized by region or by plan/product type). What this means is that what you’re asked to pay for healthcare coverage is influenced partly by you and the rest will depend on the market.
Personal factors influencing insurance costs can include:
- Your age
- Current health status
- Any pre-existing conditions
- Where you live
A premium increase might be due to you moving up an age bracket (potentially to an age which sees higher claims), a significant personal health issue that may cost a lot in future claims, or simply be because you live in a country where healthcare costs are high.
Market-related influences are less understood by consumers – but are arguably more important when it comes to setting premium rates.
What are the main non-personal drivers of premium inflation for expat insurance?
Expat insurance, or specifically international health insurance, is common for those people living and working away from their home-country. The international insurance market is strongly influenced by a number of global and local price drivers that impact what you pay initially and at renewal time. These main factors are:
- The high price of medical technology: The more hospitals and providers pay for new technology and medicines, the higher the cost of healthcare. For insurers footing those bills, the increasing costs are often passed on to insurance consumers.
- An imbalance of health resources: In areas where the supply of health services is outweighed by demand, providers (particularly private sector hospitals) are again able to charge a premium for care that’s faster and of a higher quality.
- Increased compensation for medical staff: As hospitals seek to raise prices, so too do those whose salaries they pay. Doctors are already among the highest paid skilled professionals, and their salaries and allowances are also still increasing.
- Overutilization of health services: With places around the world seeking to address the concerns of ageing populations, care providers are having to invest more in expanding their capacity to avoid overcrowding and long wait times.
In addition to these common influences on insurance pricing, meeting compliance and regulatory requirements (such as the mandatory health insurance laws of Dubai), changing economic conditions, and insurance-industry actions to combat fraud all play a part in determining how much your insurance premiums will rise by annually.
What can I do about premium increases at renewal time?
The first thing you can do to better prepare yourself for premium price discussions is to learn more about the average price inflation rates in your region. A recent report on International Private Medical Insurance Inflation by Pacific Prime can let you know whether or not your current policy’s premium increase is above or below the average for your region and plan type.
Secondly, engaging the services of an experienced insurance broker can help a lot. An intermediary, like Pacific Prime Dubai, can assess your current plan’s premium increase and let you know whether it’s in line with market expectations or not. If it’s good, they’ll handle the renewal process. If you can get a better deal, they’ll negotiate that on your behalf too. Contact the team at Pacific Prime Dubai today to get the best support for your expat insurance needs.