In this article, iPMI analyst Ian Youngman, author of the IPMI market leading report, International Health Insurance 2021 talks about how AXA has left the Middle East and why the press announcements underplay how big a deal this is.
AXA has almost completed an exit from Abu Dhabi, Bahrain, Dubai, Oman, Qatar, Saudi Arabia and all UAE states.
It still has a presence in Lebanon but a local TPA manages health insurance.
That it has sold to a local group – is huge. That the local group is part owned by a Canadian group seem incidental until you get that Canada goes its own way from the USA and Europe in global politics.
There is a shift to local regional groups in Asia, Europe and the Middle East.
The Middle East was once the go to place for brokers and insurers in health insurance- it is being replaced by Africa and South America- and China.
With compulsory health insurance in many countries the region has almost peaked. The competition is hot and with increasing regulation and competition from local insurers, making a profit may be Ok now but not in five years time.
Expats are being replaced- often by law- with locals. Most expats are not the “white middle class Europeans and Americans" that you still see pictured in IPMI brochures – but low paid Asians and Africans- with an increasing number of professional Chinese.
Some US and European insurers and brokers also see that as the US and Europe are losing influence in the region- to be replaced by China, Iran and Russia.
That the US, UK and some European allies tried to import their democratic and business models into Afghanistan and Iraq for 20 years and dismally failed- does have a knock on effect on insurance groups.
Insurers may think they are above politics, but what your country does to other nationalities does rebound onto your company in those countries - we do not live in a bubble.
Insurers and brokers may still make money out of health insurance in the region but rising healthcare costs and increased regulation is going to make it harder.
Many Gulf countries are still trying to move away from dependence on oil to other industries but from being cash oil rich they are all – to some degree- struggling. Many saw tourism and inbound international investment as their saviours – Covid has damaged the first and there are not enough international investors to go round as they too see better long-term potential in Africa. China or Latin America.
What is certain is that other insurers will follow AXA out of the region as they look at their 5 year strategies on where they want to stay, move into, expand, or exit.
For the author it means daily work updating my country and company databases - to ensure my IPMI market reports are up to date.
Looking back at what happened in the last five years and extrapolating that forward is how many reports still work – but that process is so out of date.
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