By Faisal Zeineddine, VP – Strategic Sales at Bayzat
In the United Arab Emirates, the health insurance market was valued at US$ 6.6 billion in 2020, as the COVID-19 pandemic gathered momentum and disrupted a range of business conventions. Not only were companies trying to keep their employees safe from the coronavirus; they were addressing a series of concerns from the workforce over access to care during the crisis.
Today, as restrictions are tentatively relaxed and the office is pressed back into service, echoes of the past two years remain strong. Health and wellness are top of the employee agenda. For UAE employers looking to provide the best possible version of healthcare available, the quandary is as it ever was. How do you find the right broker? How do you identify a potential business partner in an overcrowded market?
Employers realise they are now more in the shop window than employees when they go on a recruitment drive. And as candidates shop around in the post-COVID labour market, they are increasingly going to look at a potential employer’s group health insurance offering as a differentiator. For employers looking to attract and retain the best talent, a bad broker can be bad news indeed. The quality of cover provided will have a direct bearing on the employee experience. Business stakeholders generally do not know what attributes to look for in the ideal broker. Even the packages offered may not be presented clearly enough to allow those outside the industry to evaluate them. For these and other reasons, employers often settle on a multi-broker strategy to find the ideal policy when, in fact, a single broker partner is more effective. There are three main reasons why this is so.
Multi-broker: the ‘cheapest is best’ fallacy
More brokers may appear to mean more options, and therefore more chances of finding that golden policy that will delight every employee. While this logic chain may seem unassailable, the reality is an industry that is more complex. In a simple market, with perfect data flow, employers would be presented with information that would allow them to assess each package on the basis of the value it would add to the organisation.
But in the real world of UAE health insurance, a broker with less value-added propositions may give the cheapest quote, and others may not communicate their extras clearly enough. It helps to remember that in health insurance, like many industries, if one supplier stands out as the cheapest, there is often a reason for that. And the reason is rarely tied to greater value. Perhaps the broker’s roster of insurers is smaller. Or their extended services and support — vital in extracting maximum value from policies — is limited.
Multi-broker: the information pathway problem
Next, the employer should be aware that not all the brokers they approach will be able to give them all the options available. Even if an insurance company is on the call-list of two brokers — let’s call them A and B — if A is the first to approach the provider, then they will be the only broker that can offer the customer a quote from that provider. This is because insurance companies make it a rule not to release more than one quote for a given end-customer.
Perhaps Broker A was contacted first by the customer or was merely the quickest in submitting their request for a quote. Either way, Broker B will not be able to present the same insurance company as an option. A system that rewards speed over quality is hardly ideal, and the employer will be left with incomplete information and a basket of options that falls short of the ideal.
Single broker: the value champion
Business stakeholders use brokers to cut through the information thicket and come back with roses. Brokers know the industry. They know the insurers. They save organisations precious time by sifting out value from a mountain of options. Apart from assuming the admin burden associated with finding group health insurance, only a single-broker strategy allows the broker to focus on finding the best value.
A broker that is not bidding against multiple others can assume a more advisory role, rather than having to formulate a sales pitch. In such an approach, employers eliminate the need to compare bids and analyse policies, leaving these tasks to the broker. Market and product knowledge can be allowed to dominate, as they should. Brokers in such a non-competitive space can then help clients to minimise costs, reduce risk and optimise coverage and support.
Further, a single-broker strategy opens the door to an ongoing relationship in which the business partner — the broker — removes the headaches of search, renewal, analysis, comparison, negotiation, and others, allowing businesses to consistently add value for their employees while not having to devote significant resources. Over time, the broker will come to know the client’s business, through collaboration with HR and executive teams, and work with decision-makers on delivery of the optimal package.
Differentiation means prosperity
In the years that follow, employers will always have to find ways of improving coverage for their employees. Health insurance is not the disposable extra it once was. Employees of all ages have been exposed (in uncomfortable proximity) to the importance of great healthcare. Employers need a true partner to help them deliver it, rather than a melee-pit of competing salespeople.