Insurance Companies Struggling as Healthcare Costs Rise in Lebanon

Published September 25th, 2018 - 05:55 GMT
The medical insurance segment posted a net profit margin of 3.5 percent in 2017 compared to 4.6 percent in 2016. (Shutterstock)
The medical insurance segment posted a net profit margin of 3.5 percent in 2017 compared to 4.6 percent in 2016. (Shutterstock)

Health insurance companies in Lebanon saw their profits in 2017 shrink by 27 percent to $15.6 million, due to the rising cost of medical care and the nonrenewal of contracts by many customers. According to the Insurance Control Commission, the total net profits of insurers’ health insurance branches in Lebanon reached $15.6m in 2017, constituting a decline of 27 percent from $21.3 million in 2016.

“The medical insurance segment posted a net profit margin of 3.5 percent in 2017 compared to 4.6 percent in 2016, and relative to a profit margin of 11 percent for the insurance sector. Health insurance covered 936,252 persons in 2017 through various medical plans that 36 health insurers offered in the market,” Byblos Bank Lebanon Weekly Monitor said in its last report.

Nassib Ghobril, the head of Byblos Bank Economic Research Department, said one of the probable reasons for the drop in health sector profits is the high cost of medical care.

“It also seems that some of the clients did not renew their contracts with the insurance companies – and this may be due to the economic difficulties,” he added.

The “group” health sector’s written premiums reached $255.1 million in premiums, while those of the “individual” health segment totaled $199.4 million, accounting for 43.9 percent of the total.

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“The medical insurance market is heavily concentrated, as the top five companies in the group health segment underwrote 64.8 percent of premiums for groups, while the top five insurers in the individual health segment underwrote 57 percent of health premiums for individuals in 2017,” the report said.

MEDGULF led all insurers with $67.4 million in medical premiums in 2017 and accounted for 14.8 percent of the branch’s aggregate premiums, followed by Bankers with $54.9 million (12.1 percent), Continental Trust with $47.1 million (10.4 percent), AXA Middle East with $43.7 million (9.6 percent) and Allianz SNA with $41.9 million (9.2 percent), it added.

“Further, paid claims totaled $329.1 million in 2017, constituting a decline of 1.8 percent from $335.3 million in 2016. Gross claims paid from the group segment reached $216.2 million and accounted for 65.7 percent of aggregate health claims in 2017, while those of the individual segment amounted to $112.9 million and represented 34.3 percent of the total last year,” the report said.


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