Rising health insurance premiums in the UAE: What you need to know now
The UAE’s push for universal health coverage is a model of social progress, but it also underscores the economic realities of mandatory insurance
04 February, 2026
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The UAE is accelerating its push for universal health coverage, aiming to ensure that every resident has access to essential healthcare.
While this move represents a major social victory, it is also redefining the economics of insurance, impacting premiums, utilisation patterns, and the financial sustainability of insurers. As mandatory insurance schemes expand across the emirates, employers, insurers, and policyholders are navigating a landscape that combines opportunity, obligation, and cost pressures.
Read more-Health Insurance in UAE: What you need to know about it
According to the Central Bank of the UAE’s Quarterly Economic Review, the UAE insurance sector maintained strong growth in Q2 2025. Key indicators such as written premiums, technical provisions, claims paid, and equity all rose, reflecting a sector that remains well-capitalised with healthy capital adequacy and earnings ratios.
The number of licensed insurance companies declined slightly to 583, comprising 22 traditional national insurers, 10 takaful national companies, 25 branches of foreign insurers, and one foreign reinsurer. Meanwhile, insurance-related professions increased to 508, demonstrating the sector’s expanding workforce.
Gross Written Premiums (GWP) rose 14.5 per cent year-on-year to Dhs40.9bn in H1 2025.
Growth was broad-based, with property and liability insurance up 17.8 per cent, health insurance climbing 12.7 per cent, and life insurance and fund accumulation products increasing 11.2 per cent, driven largely by demand for individual life insurance.
Federal health initiatives: Expanding access
The UAE has allocated Dhs5.745bn, 8 per cent of the federal budget for 2025, to healthcare and community prevention services. In a major policy shift, the UAE cabinet approved mandatory health insurance for private-sector workers and domestic employees without existing coverage, effective January 1, 2025. Under the mandate, private-sector employers and sponsors must provide insurance coverage for registered employees.
In parallel, the cabinet adopted the National Policy for Improving Women’s Health to guarantee access to preventive, therapeutic, and rehabilitative care. The Emirates Genome Council has also included genetic testing in pre-marital screening for Emirati citizens, reinforcing preventive healthcare initiatives source.
These moves, experts say, not only broaden coverage but also integrate insurance into the legal and regulatory framework, fundamentally altering how healthcare services are financed and consumed.
Mandatory insurance: A social win with financial implications
While these initiatives expand access, they also place pressure on insurers and employers.
“Health insurance premiums in the UAE have been rising steadily, with average increases of around 10 per cent year on year,” said Hitesh Motwani, deputy CEO of InsuranceMarket.ae. “This is driven by a combination of higher medical utilisation, rising treatment costs, and broader inflationary pressures within the healthcare system.”
The legal perspective is clear: coverage is increasingly seen as a necessary obligation rather than an optional employee benefit. Dubai and Abu Dhabi were the first emirates to make health insurance mandatory for residents, linking coverage to immigration and labour regulations.
According to the Central Bank’s 2024 statistics, this framework led to health insurance premiums rising 20.9 per cent year-on-year to Dhs31.3bn, with the number of policies increasing 59.9 per cent to 2.2m.
“This expansion of the insured pool increases utilisation, drives claims, and pushes renewal pricing higher,” noted Michael Kortbawi, partner at BSA Law. The federal rollout of a basic scheme across other Emirates starting January 1, 2025 further reinforces this dynamic, connecting insurance to residence permits and setting co-payment rules that shape consumption patterns.
The cost of compulsory coverage
Beyond legal obligations, rising premiums also reflect the mechanics of a mandatory system.
“When access seems free at the point of service, usage increases, and overuse becomes common,” Kortbawi explained. Controlling this “abuse cycle” requires pre-authorisation, co-insurance, and auditing, adding administrative costs that ultimately influence premiums. In short, insurers pay twice: first through increased claims, and second through mechanisms designed to manage excessive utilisation.
Medical inflation also plays a significant role. Hospital charges, specialist fees, diagnostics, and complex procedures have consistently risen faster than general inflation. Hitesh Motwani emphasised that insurers must incorporate these costs into pricing models to sustain coverage and maintain policyholder access to quality healthcare.
Lifestyle-related and chronic conditions compound the effect. Around 40 per cent of policyholders declare at least one pre-existing condition, often linked to diabetes, hypertension, or heart disease. “Ongoing medical care, regular consultations, medications, and monitoring increase overall claims utilisation, impacting average premiums across the pool,” Motwani said.
Long-term trends and economic resilience
Despite rising costs, the UAE continues to demonstrate strong long-term trends in healthcare affordability and accessibility. David Denton-Cardew, head of Propositions at Zurich International Life Ltd., noted that economic resilience, including 4.8 per cent GDP growth, financial wealth of $1.5 trillion, and more than 81,000 millionaires in Dubai, has supported improvements in healthcare standards.
“The focus on wellbeing, infrastructure development, and government initiatives has resulted in longer, healthier lives,” Denton-Cardew said. These improvements have contributed to a gradual decline in life insurance costs over time, highlighting the balance between social benefits and financial pressures in a growing insurance market.
Balancing coverage, costs, and sustainability
The UAE’s push for universal health coverage is a model of social progress, but it also underscores the economic realities of mandatory insurance. Expanding access generates higher claims, administrative costs, and pricing pressures for insurers, while employers must navigate new obligations.
The key challenge will be maintaining a system that is both socially inclusive and financially sustainable. Effective regulation, co-payment frameworks, and proactive management of claims utilisation will be critical in ensuring that the UAE can continue to provide comprehensive coverage without destabilising the insurance market.
As the federal scheme rolls out across emirates in 2025, all eyes will be on how insurers, employers, and policyholders adjust to a landscape in which health coverage is both a fundamental right and a complex financial commitment.





















