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Of fraud and overmedication: An interview with Dr Michael Bitzer, CEO, Daman

Of fraud and overmedication: An interview with Dr Michael Bitzer, CEO, Daman

Hoping compulsory health insurance will roll out across the UAE, Daman CEO Micheal Bitzer weaves through the city’s insurance web, tackling malpractice and unrealistic pricing and UAE’s new investment restrictions.

July 13, 2011 12:56 by



As founding CEO of National Health Insurance Company (Daman), Dr Michael Bitzer nurtured the Abu Dhabi government-owned company as the largest health insurance provider in the region.

Since implementation of compulsory health insurance in Abu Dhabi, patients have affordable access to their healthcare needs and the customer base rose to more than 2.1 million. Daman is now looking at expansion opportunities outside the UAE.

Dr Bitzer spoke to Policy on the health insurance sector, rising medical inflation and the increased incidence of fraud.

Here are excerpts from the interview:

Q: There are increased incidences of fraud involving doctors, clinics and pharmacies. How can this be regulated? How can insurance companies guard against medical frauds and malpractice?

I am sure there is quite a bit of insurance misuse. The claims we received from health facilities—both governmental and private—however, are subject to an auditing process to detect any irregularities. Each claim is subject to thousands of electronic processes to verify the accuracy of the data and the absence of any fraud or irregularities or any errors.

Fraud is something which happens in every market, but there are relatively few cases here in the region. Our market is still maturing – and we believe that through better education and raising awareness of the serious nature and consequences of fraud, as well as the damage it causes to law-abiding policyholders, this can be counteracted. Fraud results in unfairly increased premiums for customers, and we are doing as much as we can to prevent it.

There are several measures to guard against medical frauds, but I think technology plays a key role. For example our integration with the Emirates ID program has played a significant role in counteracting instances of fraudulent activity.

Q:  Do you think there are cases of over-medication that hoodwink insurance companies?

It is a phenomenon that has been noticed. We have been working on guidelines for healthcare providers to limit this.

Q: When do you expect compulsory health insurance coming to Dubai and other emirates?

The big bang was Abu Dhabi introducing compulsory health insurance in 2006, and it was a pioneering effort for the whole region. All other GCC markets were closely monitoring what was happening here. It’s a real success story.

Healthcare for expatriates was required from mid-2006 onwards in government departments and large companies, and from the beginning of 2007 it was made necessary for all expatriates.

Everyone is now waiting for the other emirates, especially what Dubai is going to do. It’s difficult to predict when exactly compulsory health insurance will come to the rest of the UAE. We expect an announcement this year, 2011, though not the actual implementation.

Q: What is your investment strategy?

Our conservative asset allocation is derived from the ALM (Asset-Liability-Management) requirement that we have.

Being a health insurance company, relatively high liquidity of our assets becomes essential. Therefore at least 80 per cent of our investments are in fixed deposits with local banks.

Q: The UAE Insurance Authority has proposed certain limits on insurance company investments. How far will this affect your investment plans?

We welcome the regulation, as it will make companies focus on insurance management rather than on investment management. Daman welcomes any regulation from the Insurance Authority, whether it is related to Solvency, Technical Reserves or Investment. This should result in a sound insurance market, where the focus should be on risk adequate premium calculation rather than on investment income.

Q: Insurers in the UAE would be required to hold at least 80 per cent of their investments in the UAE. Do you think this will limit your investment options?

The UAE is our home market and we are confident that investments in the UAE can support our objectives. Nevertheless, a slightly higher international portion could further support diversification which is an important element of risk management.

Q: What’s Daman’s growth strategy? And what are the new products you plan to launch?

We continuously challenge ourselves to better serve our members. Effective in early 2011, under our enhanced plans, all newborn babies are now included under their mother’s policy free of charge.

To better serve the needs of our current and future subscribers, we will be opening a new Daman branch in Musaffah.

We are also very happy with the success of our Disease Management Program (DMP), which offers additional support for Daman subscribers who have been diagnosed with acute asthma, cancer, obesity and diabetes. The program is unique to Daman, and provides subscribers with the additional support they need to manage their own respective illnesses.

Q: Daman had some two million members as of September 2010. How much has it grown now?

Today, we exceed 2.1 million members. We strive to better understand our customers and further enhance and develop new services to further meet and exceed the expectations of our existing database.

This interview was originally published in Policy, July/August 2011.



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