Another indication of Dubai’s return to economic strength comes in the form of the approval of a long-anticipated health insurance law.
From next year, health insurance will be mandatory for all citizens, residents and visitors in Dubai. Employers are responsible for the health insurance of their employees, whilst the government will be responsible for health insurance of United Arab Emirates (UAE) nationals, will provide for basic services including surgical services and maternity care. Industry commenters note that preventative health care is not part of the basic package but this is likely to change with the introduction of this law.
Besides the citizens of Dubai the clear winners here are the health care providers. When mandatory health insurance was introduced in the Emirate of Abu Dhabi in 2006, the health authority of Abu Dhabi’s (HAAD’s) health care statistics recorded a staggering 62% compound annual growth rate in outpatient claims between 2007 and 2010. It also recorded a corresponding 29% growth rate in inpatient visits. Health care providers including NMC and Al Noor have been investing in anticipation of this change in regime, with the former being better placed to benefit on account of its focus on a lower socio-economic demographic. Short-term losers include local companies, which will experience margin pressure due to increased employee costs. Whether the new regulations have been introduced too early into the economic recovery remains to be seen.
Neil Hermon, manager of the Henderson UK Smaller Companies Fund, commented:
"These are fund manager views at the time of writing and may differ from those of other Henderson fund managers. The information should not be construed as investment advice. Before entering into an investment agreement please consult a professional investment adviser. "
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