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As the Ministry of Education passed a new "benefit" for teachers and workers in the ministry in Saudi Arabia as an optional health insurance. What would be the impact positively or negatively, on the insurance industry.
My opinion is this;
a perfect insurance portfolio needs to be spread in a bell curve, where the majority are people with medium risk, high and low risks are spread at the ends with percentages around 25%.
This will create a balanced portfolio, where the company earn enough premium to cover all medical claims.
When insurance is an option, the only people that will join are the high risk. So there will be no balance, unified premium and high medical claims. thus creating a dead company that will be a burden on the insurance industry and the averages will indicate a damaged insurance market.
If Medical insurance will be an option, the insurance companies solely depending on Medical business will suffer. In our region mostly people are not aware about how much beneficial medical insurance is, and how much their lives are secure with this insurance. Trend is mostly people have to take insurance as it is mandatory and once it became an option they will avoid. So insurance companies have to do a lot in educating people to take medical insurance, Sales/Marketing team will take all the responsibility on their should to bring business.
It will definitely reduce earnings made by medical oriented insurance companies. But when awareness about medical coverage spread and reach many people then I assume people will either take their company's policy offering or will subscribe with an external IC. It is just a matter of educating people about their rights and needs.
Ultimately ICs business will be balanced and competition will structure the market. When I say competition, I imagine ICs business run like any other business where marketing, brand positioning and customer experience become the corner stone for success. So let's hope it'll work along that thought.
Its an option and its a good thing for employees as if they want it to have with the insurance company in contract with their company or with some other with their choice. Surely it may reduce the business of insurance companies but also it will end up the monopoly of few ICs
In general in our region the majority of peoples not much aware about the insurance unless for necessity so when insurance be optional the majority will not take it and this has an adverse impact on the insurance industry in term of premium income .
Thanking you.
there will be a negative effect on the insurance industry and on people, without health insurance, a lot of people will suffer from the inability to cover the cost of medical expenses and thus the percentage of sick non-treated people will increase which will affect the whole community.
plus the health insurance premiums will increase to cover for the minor population looking for insurance.
on the other hand, insurance companies will suffer more as there is a lot of burden on covering the high risk population only.
Majority of the process oriented companies keep Medical insurance as Mandatory for their employees
The number of teachers in Saudi Arabia, about 500,000 teachers in the light of indications that Iqbal large proportion of that number on the health insurance optional about 35% of any number up to about 175,000, resulting in a rise in the insured percentage of the followers of the families of the teachers before the end of this year
Medical support is a critically important benefit without which no employee can have actual peace of mind. I'm sure there would be stronger arguments to this effect!
