COOPERATIVE HEALTH INSURANCE October 2009, Issue 7

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1 COOPERATIVE HEALTH INSURANCE October 2009, Issue 7 Al-Sudairy: Our relationship with CCHI is transparent CCHI approved an amended set of by-laws that will affect more than seven million insured Qualified Staff: An urgent need The necessity of training local staff for the insurance sector

2 Editor-in-Chief: Dr. Abdullah Bin Ibrahim Al-Sharif Secretary General of the Council of Cooperative Health Insurance Asst.Editor In Chief Mohammed S. Al Hussain Asst. Gen.Secretary of Admin & Finance of the Council of Cooperative Health Insurance Consulting Committee: Dr. Mansour Bin Nasser Al-Hawasi (MOH) Deputy for Executive Affairs Member of the Council of Cooperative Health Insurance Dr. Mousaa id Bin Mohammad Al-Salman Dean of the Faculty of Medicine, King Saud University Member of the Council of Cooperative Health Insurance Mr. Sami Bin Abdullah Al-Moubarak Representative of the Ministry of Labor Member of the Council of Cooperative Health Insurance The General Secretariat of the Council of Cooperative Health Insurance PO Box Riyadh Phone: Fax: Published on behalf of: The Council of Cooperative Health Insurance Managing Director: Editor-in-Chief: Associate Editor: Editors: Publisher: Rabih Al-Amine Mustafa Shehab Amira Hamadeh Said Al-Hasanieh Group Editor (English) K. Krishnakumar Senior Designer: Hussain Mohamed Al-Bakri Distribution: P.O. Box: Riyadh 11372, Phone: Editor s letter The development of the insurance sector requires the recruitment of hundreds of qualified Saudis. Recent reports indicate the industry s need for staff is urgent, and we hope that soon, qualified Saudi nationals will be able to fill this shortage. In order to increase the number of qualified Saudi candidates for the insurance sector, training institutions and colleges should begin to play a greater role in providing comprehensive training courses for employees and fresh graduates. Some experts are even calling upon decision makers to include insurance in both high school and university curricula, in order to help educate a generation able to meet the growing needs of this important market. I would like to stress my belief that the adoption of a scientific method in managing the insurance sector in general and health insurance in particular will help the sector in performing its important role in society. Improving the insurance sector will also reflect positively on the major investments already made and also the effort to both strengthen the security and social health of Saudi society. In this, the seventh issue of the Cooperative Health Insurance Magazine, our cover story focuses on this shortage of qualified candidates, posing this central question: Who should be responsible for providing the specialized training that is urgently required to meet the needs of or our nation s insurance companies? Our main story explores the impact on the insured and insurance companies after the implementation of the new, amended Cooperative Health Insurance Regulations. While some find in the new amendments an opportunity to expand the scope of healthcare benefits for the insured, others are concerned those same amendments could push up the price of insurance policies, among other related problems. In our qualified companies section, we introduce the Saudi Indian Company for Cooperative Insurance, which offers professional, customized insurance solutions. We also profile the Riyadh Care Hospital, one of the leading private hospitals in the Kingdom and one that is dedicated to extending quality services to patients, in accordance with international standards. Our tourism section visits the beautiful Czech Republic capital of Prague, which is famed for its magical atmosphere, historic architecture, vibrant living culture and great food and drinks. The lifestyle section this issue spotlights the Saudi Arabian date palm industry, which is on a path to becoming an international symbol for the country in the same way chocolate is for Switzerland and cheese is for France. As always, we hope you find the information and topics presented in the magazine useful and insightful. Please enjoy the issue and we look forward to your feedback. Best regards, Dr. Abdullah Al-Sharif Editor-in-chief The reproduction or reprinting of any part of this magazine must have the express permission of the publisher, who reserves the right to initiate legal action against any violation.

3 News 7 Hot Topic 16 Program 38 Finance and Investment 42 Human Rights Assembly demands health insurance for prisoners The Saudi government, under the leadership of the Custodian of the two Holy Mosques, has always given the health sector its highest priority, in order to provide all citizens with an excellent standard of care using the most modern and advanced services available. The marketing of insurance products has become an important priority for the Saudi Arabian insurance sector, which itself has become one of the pillars of the national economy. The Council recently approved an amended set of health insurance bylaw that will affect more than seven million insured Qualified Companies 20 Snippets 24 Social Responsibility 26 Lifestyle 50 Ugly Betty star America Ferrera s smile worth $10 million Technology 46 Dates: The world s oldest Fruit The desert treasure not only has sustained life here but has become for Saudi Arabia what chocolate is to Switzerland The Saudi Indian Company for Cooperative Insurance boasts a marketing strategy that focuses on three main goals: maintaining the current clients of the protection and savings and general insurance services A Moral Obligation As insurance companies look to increase their commitment to social programs, the Social Responsibility Council announces a new booklength CSR manual Given 18 months, the company that helps to process 50 percent of all health insurance claims in South Africa says it can streamline Saudi Arabia s systems Interview 30 Cover Story 34 Travel & Tourism 54 Al- Sudairy: We have a transparent relationship with the Council Prague is one of the most beautiful cities in Europe. Set along the banks of the Vltava River, the city with its townscape of burger houses, palaces punctuated by towers Qualified Staff: An urgent need The necessity of training local staff for the insurance sector Around the World With the legacy of apartheid s system of racial segregation, high incidences of AIDS and an inadequate public infrastructure 62

4 Seven million insured fall under amended cooperative health insurance bill The Council (CCHI) has recently approved an amended cooperative health insurance bill that will cover more than seven million insured, 1,597 service providers and 25 health insurance companies. The amended bill includes major changes in terminology, fees and rules governing the issuance of insurance policies. The bill has also expanded the powers of the Board of Supervision and Control over accredited insurance companies and health service providers. The bill states that the council can withdraw the accreditation of any service provider if it is proved to have been involved in fraud, or in the case of any company s inability to maintain the health of its beneficiaries. The bill also requires that insurance companies send the names of insured persons to the national network of health insurance within 48 hours from the effective date of the policyholder, or face the consequences. The Council is striving to develop and improve the legislative and regulatory frameworks governing the health insurance market, it being one of the most active and dynamic sectors in the kingdom, said the Secretary-General of the (CCHI), Dr. Abdullah Al-Sharif. He says that following three years of implementing the cooperative health system, the recent amendments to the bill took place after a number of meetings Medical insurance companies deny coverage for retirees Medical insurance companies have declined to provide health insurance policies for 1.3 million retirees from the public and private sectors, calling on retirement and social insurance institutions to pay the insurance policy premiums on behalf of their members. The announcement came after a recent meeting held at the Jeddah Chamber of Commerce between the Retirees Association and medical insurance companies. Medical insurance companies justified their refusal by saying that the issuance of such polices is risky, as many retirees suffer from heart disease, diabetes and obesity, all of which lead to skyrocketing costs. They added that most retirees rely on fixed incomes and are less able to shoulder the burden of rising medical costs. The cost of an insurance policy ranges from SAR 2500 to 4000, while 30 percent of retirees live on just SAR Dr. Fouad Bogari, the Division Manager of the Retirees Association in Jeddah spoke to Al Madina newspaper about the with the council s members and partners in the health insurance industry. He also says the amendments aim to simplify application procedures and upgrade the cooperative health insurance system, reflecting the aspirations and needs of all parties. problem. Medical insurance companies think providing health coverage for retirees could be very risky, he said. I do not blame them, as insurance companies care only about profit and covering retirees will cause them large losses. According to health statistics from major government hospitals, a large proportion of retirees suffer from chronic illnesses, which prevent more than 80 percent of retirees from obtaining an insurance policy. As many as 30 percent of the retirees earn salaries of less than SAR 2000, the rest earning between SAR 2500 to 4000, but the cheapest insurance policy is worth SAR 2000, Dr. Fouad said. Ali Al-Aqla, a lawyer and legal counsel, agrees with Mr. Jad that retirement and social security institutions should pay the fees of medical insurance for retirees. Those organizations are making billion of dollars from retirees, so paying the fees of insurance policies will only represent a small amount of their annual profits. CCHI organizes six health insurance training sessions Over the last nine months, the Council has organized six intensive training courses and workshops. The classes covered several topics, including the cooperative health insurance system, service standards approvals, organizing medical claims, claims management and other issues related to the latest developments in the insurance market. The courses materials were prepared by a team from the staff of the Secretariat of the Council that specializes in cooperative health insurance. More than 150 health insurance sector staff members participated in the training. By organizing these courses we aim to raise the overall level of performance of the health insurance industry, by explaining the cooperative health insurance system, its operational standards and applications to attendees, said Dr. Mohammed Al- Naeem, the supervisor of the training courses. They also aim to raise the efficiency of workers in the health insurance sector by discussing the problems and how to deal with them in accordance with regulations and standards. He says the courses take into account a diversity of training methods, such as workshops, individual and collective exercises and brainstorming. The courses were based on a participatory approach, with an exchange of experiences and open debate. Dr. Naeem says the Council within its duty to promote the health insurance industry is determined to redouble its efforts to provide training for employees in the insurance sector, in addition to upgrading the insurance services and simplifying the working mechanisms between relevant parties. News Human Rights Assembly demands health insurance for prisoners Members of the National Assembly for Human Rights in Mecca have called for insurance companies to begin offering health insurance to prisoners. They also recommended the formation of a working group of Assembly members and lawyers, in accordance with the agreement between the Association and the National Committee of Saudi Lawyers, to follow up on prisoner conditions, especially those who are still awaiting deportation. The Assembly s members also called upon the Ministry of Health to provide sufficient vaccines for swine flu, arguing that the ministries of health and education must take necessary precautions to protect students from the disease. 6 Shawwal 1430 October 2009 COOPERATIVE HEALTH INSURANCE 7

5 CCHI official: Price of health insurance subject to supply and demand The price of medical insurance for employees in the private sector is subject to the rules of supply and demand and the Insurance Violations Committee will take action against any violators according to the Secretary-General for Technical Affairs at the Council. Secretary-General Dr. Abdullah Al- Hawsi says that seven million private sector employees are now covered by the new health regulations. He also says the implementation of the health insurance system is occurring gradually. As a result, only individuals who are working under their employer s visas are currently without health insurance. The Council will review the cooperative health insurance system every three years, or upon a decision from the President of the Council. CCHI considers establishing an insurance fund to cover excessive bills The Council recently met to discuss the steps needed to establish a so-called health insurance fund to cover excessive medical bills, according to Mr. Mohammed bin Salman Al-Hussein, the Secretary- General for Financial and Administrative Affairs at the Council and Committee Coordinator of the Health Fund. The new health fund will cover patients whose medical conditions require treatment that exceeds the maximum covered by insurance polices in Saudi Arabia an amount currently set at SR 250,000. Al-Hussein says that at its seventy-fifth session, the Council also reviewed a comprehensive health insurance study that had been prepared by the American (RI ACT) Office. Following that review, the CCHI Board recommended amending the study in areas related to the establishing and regulating of such a health fund. Upon completion of an amended study and in order to establish the new health fund as soon as possible, Al-Huseein says the council will begin seeking support and matching funds from other governmental bodies. CCHI names employee of the year Khalid Bin Mohammed Al-Moqrin, head of the Revenue and Collection Department at the Council, was selected as this year s Employee of the Year. Congratulating the winner during the award ceremony was Secretary General of the Council Dr. Abdullah Al-Sharif, who wished Mr. Khaled future success and happiness. Riyadh Chamber signs agreement with Wajeef Insurance Brokerage The Riyadh Chamber of Commerce and Industry signed an agreement with the Wajeef Insurance Brokerage, which will provide quality insurance services to the chamber s members in the city of Riyadh and surrounding provinces. This agreement is part of the chamber s efforts to support and serve all of our members and in response to a number of requests from smalland medium-sized enterprises to have a credible and committed insurance company to provide the right coverage, said Hussein Al- Athel, Secretary General of Riyadh Chamber of Commerce. We formed a special committee to review and evaluated bids and offers provided by other companies, and the choice was Wajeef Insurance Brokerage. Mohammed Al Amari, the Chairman of Wajeef Insurance Brokers, says that the signing of the agreement with the Riyadh Chamber of Commerce is as a major step towards providing the best services to the chamber s members. He praises the close cooperation and good spirit shown by chamber officials. Amari says medical insurance services provided to companies and institutions of the Riyadh Chamber of Commerce and its subsidiaries will be based on the Council regulations, in cooperation with the Mediterranean and Gulf Insurance Company. Members of Riyadh Chamber of Commerce will obtain a very attractive insurance premium, since the target of this program is the more than the 100,000 people in the branches, excluding the companies and organizations affiliated with the Riyadh Chamber of Commerce, he said. Tawuniya wins Saudi Telco insurance deal The Saudi-based National Company for Cooperative Insurance (NCCI) has won a major contract to provide health insurance to staff and family of the Gulf s largest telecom firm Saudi Telecommunications Co. (STC). NCCI, better known as Tawuniya, signed a three-year contract with STC to offer health insurance to its 20,000 employees for SR 507 million (US$135.2 million), or SR 169 million per year beginning October this year. News 8 Shawwal 1430 October 2009 COOPERATIVE HEALTH INSURANCE 9

6 SIMAH: Insurance premiums reached SR 10.9 billion Insurance premiums at the end of 2008 amounted to SR 10.9 billion (US $2.9 billion), an increase of 27 percent compared to 2007, the Saudi Credit Bureau (SIMAH) says. Nabil Ben Abdallah Al Mubarak, the Managing Director of SIMAH, says that the latest developments and regulations in the insurance industry raised the total claims paid to insured during the year 2008 to SR 5.2 billion (US$1.3 billion), achieving an increase of 29 percent comparing to Moreover, he says, the total number of employees in the insurance sector by the end of 2008 amounted to more than 5,447 employees, 45 percent of them Saudi nationals. Al-Mubarak says that SIMAH is providing a wide range of insurance products and services that aim to assess the solvency of the insurance sector and its financial clients, thereby reducing insurance costs for the insured. We endeavor to provide precise mechanisms and products to raise the efficiency of the insurance sector, speeding up the decision-making process, improving the quality of insurance services and reducing its costs, he said. He says that SIMAH has recently signed a membership agreement with Allied Cooperative Insurance Group (ACIG). Under the agreement, ACIG will provide SIMAH with information related to the payment of insurance premiums, both at the level of individuals or companies, as well as information from individuals and companies. ACIG from its part will get the needed information to assess the solvency of the current or prospective customers, which would help in determining the suitable services. Dr. Omar Zuhair Hafiz Abdul Qadir, the Executive Director ACIG, extolled the agreement s virtues, The agreement will undoubtedly contribute to the development and improvement of the level of transparency and credit culture in Saudi Arabia, which will reflect positively on the customer, financial transactions and on the national economy in general, he said. It will also help insurance companies in diversifying their products in line according to the needs of their clients. Specialized courses needed to develop insurance work force in Saudi Arabia Jeddah Chamber opens two insurance brokerage offices The Jeddah Chamber of Commerce and Industry, represented by the Jeddah Council for Business Development, opened two insurance brokerage offices for small- and medium-sized enterprises at its headquarters in Jeddah. Those offices will supervise the implementation of the Council resolution concerning compulsory health medical insurance for all workers in the private sector. The offices will provide small- and medium-sized businesses with affordable and quality insurance services. The Executive Director of the Jeddah Council for Business Development, Yusuf Al- Kharaz, says that the new initiative is intended to serve the 25,000 companies registered at the Chamber of Commerce and Industry in Jeddah. News Decision makers should encourage universities, colleges and training centers to create specialized insurance courses and training programs, key officials at Saudi insurance companies say. A number of universities in other Arab countries such as in Lebanon and Jordan already offer a bachelor in insurance, which is not yet the case in Saudi Arabia, despite its steadily expanding insurance industry. The call for new training is a result of the fact that many regional companies now face a critical shortage of qualified candidates specialized in the insurance sector, to the extent that most of these companies are seeking the help of foreign workers to address the shortage of specialized people in this field, and also to address the increasing demand on insurance services. The shortage is reported to be as much as 50 percent of the total demand and has also found local insurance companies not just hiring foreign staff, but training non-saudi workers at programs in neighboring and global markets. Sources close to several insurance companies in the eastern region say that licensed companies are currently contracting private institutions to train their employees, as local educational institutions have so far failed to meet industry requirements. The sources argue that Saudi universities should launch specialized colleges for insurance, as it is one of the nation s exploding labor sectors and urgently requires more skilled hands. Currently, there are already more than 21 licensed insurance companies in the Kingdom, and many of them have been forced to provide comprehensive training and intensive courses for their personnel. The sources say that insurance companies are ready to support the establishment of insurance colleges at Saudi universities. 10 Shawwal 1430 October 2009 COOPERATIVE HEALTH INSURANCE 11

7 Insurance companies neglect remote areas CCHI report: Total number of health providers grows by 20 percent News A number of remote governorates and areas far from major cities have little to no access to insurance services, according to reports. As much as 80 percent of the registered insurance companies operate out of Riyadh, while the remaining 20 percent are headquartered either in Jeddah or the Eastern Province. As a result, residents of remote provinces and areas must travel long distances to reach the nearest insurance company. This is at the same time as insurance in the country has become more and more an essential part of life featuring as it does protection for vehicles, health and life. The Saudi insurance sector gained steam just three years ago, and the 25 companies currently registered to operate here have been reluctant to open new branches, for fear of declining profits. Few have seriously considered the possibility of expanding or opening new branches in remote areas, and at the same time, few if any have conducted economic feasibility studies to determine if rural markets could be a profitable new part of the sector. The General Secretariat of the Council recently issued its 2008 annual report conceived to monitor and document the evolution of the health insurance industry in Saudi Arabia sheds light on the sector s important achievements. Such progress, the report concludes, is in part a result of the passage of a cooperative health rule requiring the extension of insurance coverage to all private sector workers and their families. The first chapter of the report discusses the growing number of accredited health providers. According to the report, the total number of providers has increased by 20 percent over the previous year s number; with a 36 percent increase in the number of clinics, an 11 percent increase in the number of hospitals, a 23 percent increase in the number of clinic compounds, and a 16 percent increase in the number of pharmacies. The report also indicates that in 2008, the private sector share of the total registered health facilities reached 97 percent, with 1,186 facilities, while the share of public sector was three percent, with 31 of the total number of the country s health facilities. The second chapter explores the status of the 25 qualified health insurance companies. With the continued expansion of the health insurance system, the report says it is expected that in the coming years the total number of insurance companies will increase significantly. Meanwhile, according to the report, the total insurance premiums reached an amount of SR 6.3 billion, SANAD appoints Sharia h committee Sanad Cooperative Insurance and Reinsurance (SANAD) a joint stock company with a paid-up capital of SAR 200,000,000 divided into 20,000,000 shares appointed Sheikh / Dr. Abdullah bin Mohammed Al-Mutlaq, Sheikh / Dr. Mohammed Ben Ali Al Quri and Sheikh / Dr. Lahem ben Hamad Al- Naser to its Sharia committee. The new committee will verify all Sharia h aspects related to the company s contracts and products and is also assigned to conduct periodic reviews of the company s commitment to Sharia h principles. Supervising SANAD s strategic planning and sound implementation is a board of directors comprised of 11 members, each appointed for a three-year term by the company s general assembly. SANAD specializes in cooperative insurance, operating via representatives, agents, brokers and other insurance companies. 12 Shawwal 1430 October 2009 COOPERATIVE HEALTH INSURANCE 13

8 News covering more than 4.8 million people until the end of 2008, the report says. The report also explores how companies have responded to new regulations and standards, including the stipulation that health insurance companies must coordinate with the Saudi Arabian Monetary Agency in order to ensure they are following the new regulations. The Monetary Agency will also carry out field visits and follow-up meetings with health insurance companies. The report also discusses a shift in how monitoring agencies will determine violations of the cooperative health insurance system. The responsibility to do such monitoring will now rest with the Department of Insurance Violation, which will handle disputes and is charged with explaining the rules and regulations to all concerned parties, in addition to conducting field visits to detect and determine the nature of any irregularities. According to the report, the department in 2008 received 121 complaints, 71.1 percent of them directed against insurance companies, 13.2 percent against employers, 8.3 percent against the Immigration Department and eight percent concerned a variety of other parties. Finally, the report outlines a recent study that explores the severe shortage of Saudi nationals who are qualified to work in the nation s insurance industry. The study estimates that the demand for local staff for the insurance sector will grow by nearly 90 percent over the next five years. Hospital 11% Diagnoses center 0% Physiotherapy center 0% Passports Auth 8% Type of accredited health care providers Poly clinic 36% Medical tests laborator 1% Glasses shop 9% other 7% One day operation 1% Employer 13% Pharmacy 16% One physitian clinic 3% Type of complaints taken in 2008 HCP 1% Insurance 71% Multi clinic 23% Kingdom of Saudi Arabia Council of Cooperative Health Insurance General Secretariat Alshafa Street, King Fahd Road. Fax: P.O.Box: Riyadh Customer Service Center (IVR) 14 Shawwal 1430 October 2009 w w w. c c h i. g o v. s a

9 Hot Topic Questions & Reflections: Amended cooperative health insurance by-laws The Council recently approved an amended set of health insurance by-laws that will affect more than seven million insured, 1,597 service providers, and 25 insurance companies. The amended by-laws seek to address and solve problems concerning benefits and pricing for Saudi Arabia s insurance policies. But these amendments, intended to do good, have had the opposite effect for some insurance company officials, who have announced possible price raises for policies and the likely necessity of imposing additional fees on some beneficiaries. To discuss the impact of these amendments on the Saudi insurance sector, we met with Dr. Abdullah bin Ibrahim Al Sharif, the Secretary General of Council (CCHI) and Dr. Omar Zuhair Hafiz, Chief Executive Officer of Allied Cooperative Insurance Group (ACIG). The reputed benefits For his part, Dr. Abdullah Al-Sharif says the new amendments aim to simplify and clarify the health insurance procedures for all parties, and that these amendments were approved after consulting with involved partners in the cooperative health insurance industry. The new amendments aim to keep pace with the aspirations of all parties, he said. This is a positive step toward developing the industry and improving the legislative and regulatory frameworks governing the sector. The amended regulations were based on the Council s decisions and after consulting with the involved partners in the health insurance industry. He says that the amended list of regulations would contribute to increasing the effectiveness of the health insurance market and would also improve the management of insurance claims. According to the Dr. Al-Sharif, the new rules include provisions for additional benefits for the insured, such as covering health counseling with specialists and consultants, dialysis expenses up to SR 100,000, expenses from treating acute psychiatric conditions up to SR 15,000, and the expenses of hospitalization. The amended list also sets the daily hospitalization rate at SR 600, and raises insurance benefits for pregnancy and childbirth, with an upper limit of up to SR 15,000 rather than SR 10,000, as well as increasing the benefits for IVF children to SR 250,000. Perhaps most importantly, the new regulations require that insurance companies cover beneficiaries of all ages, without specifying the age of the insured, and that policies must cover conditions that most commonly affect the elderly, including chronic diseases such as high blood pressure, diabetes and heart disease. The new system also requires insurance companies to grant health insurance to all workers in the private sector both residents and Saudis nationals and their dependents, including husbands, wives, male children under 18 years old and unmarried daughters. Industry concerns Speaking from the insurance companies perspective, Dr. Omar Hafez sees the impact of the new regulations quite differently. His chief complaints are 16 Shawwal 1430 October 2009 OOPERATIVE HEALTH INSURANCE 17

10 Hot Topic The new regulations cover the shortcomings of the previous list, as the health insurance market is subject to many variables. Dr. Al Sharif said. that the new health regulations should not have put all beneficiaries into one category and should have taken into account the greater cost burden on service providers. He also says health insurance coverage should have age limits, such as the previous cap of 65-years-old. Insurance companies have no clear stand now regarding those adjustments; as they are obliged to work under the Council regulations, Dr. Hafez said. I must note that the council has invited all insurance companies to submit their comments before approving the amendments. I am not sure, however, if the council asked the health service providers, and the beneficiaries of the service to submit their comments. Dr. Hafez say it s probably too late now to change the new amendments. Given a reasonable amount of time, however, he says insurance companies will have a better chance to make their case for changes, once the impact of the new rules becomes clear. I see that the new amendments aim to expand the scope of benefits for the insured, and the number of people under the health insurance coverage, Dr. Hafez said. This undoubtedly serves the health sector in terms of providing better care for more people, thus increasing the demand for health services. This will put pressure on service providers to improve their services and increase investments in the health sector. Dr. Al-Sharif is skeptical that the amendments will have a negative impact on insurance companies. He says that the new and previous list of regulations included specific paragraphs for the benefit of insurance companies and specifying their responsibilities towards the insured and service providers. The new regulations cover the shortcomings of the previous list, as the health insurance market is subject to many variables, Dr. Al Sharif said. Article 112 gives the Council the authority to review and make adjustments on the list every three years or whenever need arises. New fees Following the new rules, experts say insurance companies may have no choice but to increase the price of insurance policies for certain groups, such as pregnant women. But Dr. Al-Sharif says prices for insurance premiums are agreed upon with insurance professionals and actuary specialists. He says that some insurance companies may impose additional costs on insurance policies for women to cover pregnancy and childbirth, but there is a minimum age and an upper limit for such increases. The new system gives freedom to insurance companies to determine the rate of the insurance premium, in accordance with the regulations and standards set out in Article 33, paragraph (b), which states that insurance premium rates should be reasonable, and should not lead to a decline or increase in the price of the company products. According to the rules, insurance companies should also share with the Saudi Arabian Monetary Agency the mechanisms with which they determine prices. Further, rules state that insurance companies should not rely solely on other companies prices. Dr. Hafez, in turn, acknowledges that the amendments are in the interest of the patient and that they will likely increase costs for insurance companies. But that s all part of the plan, he says. Insurance companies will increase the prices of insurance policies to cover the new financial expenses, he said. I expect that price of insurance policies will witness a big leap in the beginning of 2010, with the renewal of new policies after the amendments became binding. For example, the cost of an insurance policy for married women and the elderly will definitely increase. Asked if the new amendments had fully addressed all previous deficiencies in the previous list, Al- Sharif was honest. We tried to cover all the deficiencies, but as you know the health insurance is subject to many variables, and the council has the authority to review and make adjustments on the list every three years, he said. I can assure you that the improving and reviewing process is Insurance companies have no clear stand now regarding those adjustments; as they are obliged to work under the CCHI regulations. Dr. Hafez said. ongoing and non-stop. We only aim to serve the health insurance market. Under the new cooperative health insurance system rules, employers must provide health insurance coverage for all their workers and their families. Currently, however, most employers provide insurance only for up to four persons the worker and three members of his family and sometimes for the worker alone. Would the new amendments really cover entire families? Yes, Dr. Al Sharif says, but only under certain circumstances. The cooperative health insurance system states that health insurance is compulsory for all workers in the private sector both residents and Saudis nationals and their dependents, including the husband, wives, male children under the age of 18 and unmarried daughters, he said. The system does not exclude any of them as long as they are living in Saudi Arabia. With the passage of the amended regulations, one question still remains: have insurance companies applied Article 87, which requires companies to appoint specialist doctors to verify if treatment is actually needed for employees? Insurance companies must abide by the provisions of the amended list, including the appointment of a pathologist in case the insurance company decided to get help from a third party to manage their health insurance claims, Dr. Hafez said. Dr. Hafez also stresses that the only way to deal with additional costs including appointing specialist doctors is to consider them when calculating the costs of insurance polices, in order to prevent any financial corruption or misuse of the policy. Insurance companies can establish special departments to manage the claims to prevent exploitation, he said. But with the lack of qualified Saudis in this field, I hope Council will address this issue with the Ministry of Labor to grant visas for doctors from aboard. Moving forward, Dr. Hafez says their were still unique and local problems yet to be addressed. I would also like to note that re-insurance represents an additional cost to insurance companies and may prevent them in some cases from providing appropriate prices, he said. Therefore, I suggest that the Council should coordinate with licensed re-insurance companies and other insurance companies to reach to a standard format for health reinsurance agreements, which would take into account the local variables and objectives of the health sector. 18 Shawwal 1430 October 2009 COOPERATIVE HEALTH INSURANCE 19

11 Qualified Companies Saudi Indian Company for Co- operative Insurance: The Saudi Indian Company for Cooperative Insurance boasts a marketing strategy that focuses on three main goals: maintaining the current clients of the protection and savings and general insurance services, increase revenue from the existing customer base by selling existing products and new products and, finally, attracting new business and increasing market share through various channels. The Saudi Indian Company for Cooperative Insurance ( SAUDI INDIAN ) was granted license to establish Joint Stock Co-operative insurance company in accordance with Royal Decree No.M/60 dated 18/09/1427H corresponding to 11/10/2006, and Ministerial Resolution No.233 dated 11/09/1427H corresponding to 9/10/2006. The Share Capital of the Company is SR 100 million consisting of 10 million shares of equal value, the value of each of them being SR 10. In accordance with the provisions of the Insurance Law issued by Royal Decree no. M/32 on 2/06/1424H, and its executive regulations and rules in Saudi Arabia, the Saudi Indian Company for Cooperative Insurance can practice all types of cooperative insurance, including reinsurance, representation, communication, and mediation, whether in insurance or investment funds, or sell/ lease/exchange cash and immovable property ownership. Insurance Services: The Saudi Indian Company for Cooperative Insurance offers a wide range of Al- Ameen products that was designed by established companies, including the Indian Company for Life Insurance, Life Insurance Corporation (International) in Bahrain, and New India Insurance Co. Ltd. The Saudi Indian Company for Cooperative Insurance offers two types of products: 1- General Insurance: Insurance of Motor Vehicles Private car & Commercial with a choice to opt for Comprehensive cover (Own Damage & Third Party Liability) or only Third Party Liability (for Driving License or Specific Vehicle) Property Insurance Insurance on fire damages and the associated risks, lightning, theft, loss of profits, comprehensive property insurance for all hazards Marine Insurance Internal transfer (roads, railways), insurance in accordance with marine shipping terms, marine insurance by mail, open policy, fees, vendors benefits, and naval vessels Engineering Insurance machinery insurance, boilers and pressure equipment and electronic equipment insurance 2- Protection and Saving Insurance: Takaful insurance plan providing a combination of savings and risk benefits in compliance with Takaful principles and covering various strata of society and the life cycle of individual/family protection plan Participating endowment plan (education, marriage) Cash-back plan Money back and protect lifelong Child benefit plan Double cover endowment Ashadeb plan Janarakesha plan Bimainc plan Jeevan Riva plan Collective insurance schemes Vision The Saudi Indian Company for Cooperative Insurance endeavors to develop a general Insurance business in the best interests of the community. The company will provide financial security to individuals, trade, commerce and all segments of the society at an affordable price, in the most professional manner, backed with international competence and a with focus on customer satisfaction. The company also aims to meet the challenges of the emerging market at the lowest cost while maximizing customer welfare. The Saudi Indian Company will increase its customer base, enter into new market segments, provide cost-effective insurance policies, and achieve superior returns for its shareholders; thus contributing to the development of the company s reputation in the Saudi insurance market. The company s marketing strategy focuses on three goals: maintaining the current clients of the protection and savings and general insurance, increasing revenue from the existing customer base by selling dual-existing products and new products and, finally, attracting new business and increase market share through various channels. To achieve the objectives of its marketing strategy, the Saudi Indian Company, which enjoys many years of experience, will focus on advertising and marketing campaigns for the protection and savings and general insurance services. It will distinguish itself from other companies by offering a wide range of products and customized insurance solutions, and broad- and high-quality services. Goals The Saudi Indian Company for Cooperative Insurance seeks to achieve a level of total annual premiums that will enable it to 20 Shawwal 1430 October 2009 COOPERATIVE HEALTH INSURANCE 21

12 Qualified Companies have a large market share, good returns on investments, and establish controls, regulations and internal standards that guarantee the rights of the insured. The company also aims to provide competitive insurance products by implementing strong and effective strategies and continuously looking for new business opportunities. The Saudi Indian Company promotes the good reputation of the company through advertising and quality services and products to suit local requirements. Moreover, the Saudi Indian Company for Cooperative Insurance extensively works to increase its Saudization rates, expand the company s customer base by opening new branches, establish new distribution channels in accordance with the principles of insurance firms and control standards, transfer risk through reinsurance with major international reinsurance companies, and expand its investments to include investments in bonds and securities. Competitive advantages The Saudi Indian Company has many competitive advantages compared to other insurance companies. The most important advantage is the good reputation of its founders and their many years of experience in the insurance market. The company is also one of the few companies that offer a wide range of protection and savings insurance products. Moreover, it provides the necessary support from its established companies, which boast extensive experience in this area. The Saudi Indian Company itself has an extensive knowledge of local and foreign communities, and its management team boasts many years of experience. The company s diverse customer base covers the sectors of general insurance and protection and savings insurance. Finally, the Saudi Indian Company has signed many reinsurance agreements with international companies in the area of reinsurance. Message The Saudi Indian Company for Cooperative Insurance endeavors to develop a protection and saving and general insurance business that is in the best interest of the community. The company provides financial security to individuals, trade, commerce and all segments of the society at an affordable price, in the most professional manner, backed by international competence and with a focus on customer satisfaction, thereby meeting the challenges of the emerging market at the lowest cost while maximizing the customer s welfare. The Saudi Indian Company for Cooperative Insurance seeks to achieve a level of total annual premiums that will enable it to have a large market share, good returns on investments, and establish controls, regulations and internal standards that guarantee the rights of the insured. The Saudi Indian Company aims to increase its customer base, enter into new market segments, provide costeffective insurance policies, and achieve superior returns for its shareholders; thus contributing to the development of the company s reputation in the Saudi insurance market. Moreover, the Saudi Indian Company for Cooperative Insurance works to increase its Saudization rates, expand the company s customer base by opening new branches, establish new distribution channels in accordance with the principles of insurance firms and control standards, transfer risk through reinsurance with major international reinsurance companies, and expand its investments to include investments in bonds and securities. Partnerships The Saudi Indian Company has a strong relationship with its established companies, including the Indian Company for Life insurance, Life Insurance Corporation (International) in Bahrain, and New India Insurance Co. Ltd., which provide administrative and technical support to the new management under administrative and technical agreements. The company aims to sign a number of management and technical agreements with the Indian Company for Life insurance, Life Insurance Corporation (International) in Bahrain, and New India Insurance Co. Ltd., and any other appropriate companies. Such agreements will take place after approval from the Saudi Arabian Monetary Agency (SAMA) in regards to the actuarial estimates, product development and information technology services and re-insurance and health care. The company will also sign a number of administrative agreements and agreements with experts in relevant work areas after getting the necessary approval from concerned authorities. The Saudi Indian Company on November 1, 2005 signed a financial advisory services contract of SR two million with Manar Sigma Financial Consulting. According to the agreement, Manar Sigma Financial will assist the company in preparing its financial file to SAMA, according to the cooperative insurance companies system. Additionally, Manar Sigma Financial will provide financial advice to the Saudi Indian Company for six months starting from the date of signing of the agreement, subject to renewal for another period. Investment policy The regulations established by the Saudi Arabian Monetary Agency limit both the investments in some products and the debt levels for multiple instruments. Since the standards vary for the savings and protection and general insurance funds, they must be considered separately. Therefore, the Saudi Indian Company distinguishes between shareholder funds, and the amounts that have been obtained from Takaful products. As a result, the company will manage four categories of funds, taking into account the orders and the returns and evaluating the investment tools and boundaries to prevent loss. The company s policy of investment focuses on guarantee of assets liabilities and their application under SAMA rules. It may give the total investment amount or part thereof to an external investment manager, or external investment managers to manage. The Saudi Indian Company plans to provide protection and savings insurance under policies aimed at different groups, such as employers, employees, professionals, cooperative societies, and other sectors of society. In spite of the fact that international companies dominate the collective insurance market, the Saudi Indian company is offering competitive collective protection and saving insurance products based on low premiums, simple conditions and easy manageability by issuing one policy covering all staff members. The insurance premiums are determined by age, number of members, occupation and working conditions of the group. But there are certain conditions for the application, such as the minimum size of the group, and the minimum number of participants to make the plan viable. The Saudi Indian Company also plans to offer protection and saving products for the local population. Research and marketing The Saudi Indian Company s existing products comply with the current requirements of the market. The company will design comprehensive insurance coverage and comprehensive insurance policies for different types of personal insurance, according to market changes and future requirements. The company intends to focus on specific areas of research and development that could help in creating new insurance coverage, providing customized insurance solutions as requested by the client, promoting actuarial studies and implementing new insurance systems. It is expected that the Saudi Indian Company will become one of the more competitive, organized and effective companies in the market. Consequently, in order to succeed in this changing environment, the Saudi Indian company aims to distinguish its insurance services from the services provided by other insurance providers. The company s marketing strategy focuses on three goals: maintaining the current clients of the protection and savings and general insurance; increasing revenue from the existing customer base by selling new products and dual-existing products, which were designed by the founders; and, finally, attracting new business and increasing market share through various channels. To achieve these objectives, the Saudi Indian Company, which enjoys many years of experience, will focus on advertising and marketing campaigns for the protection and savings and general insurance services. It will distinguish itself from other companies by offering a wide range of products and customized insurance solutions, in addition to broad and high quality services. 22 Shawwal 1430 October 2009 COOPERATIVE HEALTH INSURANCE 23

13 In Germany, employees are insured only for accidents outside the toilet The German Federation of Trade Unions issued a warning to workers and staff indicating that the company insurance policy covers only work-related accidents outside the toilet, Asharq Al Awsat reported. Eberhard Ziegler, from the Federation of Insurance Companies Against Work Accidents, says that insurance companies consider accidents outside the toilet to be work accidents, and they will pay for such accidents. But he says they will not bear the costs of what might happen to the employee while he is inside the toilet. Ziegler stresses that such insurance coverage only covers accidents during working hours not the costs of private accidents. This means that insurance companies will compensate workers if they were hit by a car or if something falls on them on their way to the toilet, but they will not compensate a worker if a bulldozer storms in while he is inside the rest room. He says that insurance companies typically cover accidents outside the company canteen, but they are not responsible for the incidents inside, like injuries to a hand from smashing dishes. Insurance companies will also compensate the staff members during work-related parties, Ziegler said. But they will not pay a penny if the employee injured himself during a fight at the party. Ziegler advised all workers and staff members to submit requests for compensation from their companies regardless of the place of the incident. The employment tribunal will consider each case according to circumstances and decides whether the victim is entitled to compensation or not. Ugly Betty star America Ferrera s smile worth $10 million A picture is worth a thousand words, but did you know a smile is worth US$10 million? That is the value of an exclusive insurance policy that Aquafresh has secured for the smile of America Ferrera, the star of the hit television show Ugly Betty. The Lloyd s of London policy was revealed in New York City by Aquafresh White Trays. Officials say Ferrera s policy is one of the most valuable the prestigious insurer has ever granted for a body part. The announcement is part of a program to raise money for Smiles for Success, a nationwide organization that provides free dental care for women transitioning from welfare to work. New Aquafresh White Trays is supporting Ziegler s comments came after the launching of the Insurance Companies Federation s report on work relatedaccidents, which stated that more than 960,000 Germans suffered from workrelated accidents in Smiles for Success by donating US$1 for every purchase. While Ferrera s US$10 million smile may be one of the most recent celebrity body parts to be insured, Ferrera joins an esteemed list of famous parts, which has included Keith Richards fingers and Jamie Lee Curtis s legs. Real Madrid insure Ronaldo s legs for 100m Real Madrid has protected itself in the event of Cristiano Ronaldo suffering a serious injury by insuring the Portuguese superstars legs for the grandiose sum of 100 million. The former Manchester United star, who singed a record-breaking 94 million switch to the Bernabeu, has been given unique treatment in keeping with his importance to the side. Given how much they d invested in the player, it was no surprise that Los Blancos acted quickly to ensure that they would be compensated in the event of Ronaldo being unable to play. Cheese taster s nose insured for $8.2 million A master cheese grader in Somerset, UK, has insured its cheese taster s nose for $8.2 million because his expert sense of smell earns a lot of money each week. The British Broadcasting Corporation (BBC) reported that Nigel Pooley, 63, has worked at family-run Wyke Farms, in Somerset, for the past 12 years. Pooley s bosses will now pay insurance firm Lloyd s of London $41,000 a year to insure Pooley s nose and sense of smell. A representative from Lloyd s said that Pooley breaks new ground as our first cheese nose. It is noteworthy that the $ 8.2 million was calculated by multiplying the period needed to replace Pooley, which is around 5 weeks, by the loss of the company per week, which is equivalent to $1.4 million. I hadn t thought about the value of my nose before, it s just part of what I do. I suppose I took it for granted until now. I love what I do and I will continue doing it, said Mr. Pooley. Snippets Woman s death sheds light on U.S. health insurance crisis The tragic stories of people without health insurance in the United States are numerous. This story is about an uninsured woman, aged 27 years old and suffering from cancer. She was still responding to the treatment when her doctors gave her family the bad news. The woman had been connected to the breathing machine for 25 days. At that point, her family was notified that the hospital would give her 10 more days. On the 11th day, they would turn off the machine. The woman s family was in shock. How could doctors stop the medical treatment if the patient was responding to treatment? They tried to move their daughter to a free hospice and to reach out to charity but no one responded. The woman died immediately after they took off the breathing machine. According to the victim s sister, the problem was funding. Her sister died because she had no insurance. Former U.S. President George W. Bush had announced that he would reform the nation s health care system, but nothing was achieved. Now it is current President Barack Obama s turn. 24 Shawwal 1430 October 2009 COOPERATIVE HEALTH INSURANCE 25

14 Social Responsibility Social responsibility A As insurance companies look to increase their commitment to social programs, the Social Responsibility Council announces a new book-length CSR manual Confusion about concept One matter little understood among those in the Saudi Arabian business community is the basic idea of Corporate Social Responsibility (CSR) and its actual role in helping improve the community. In fact, as was determined over the course of a recent survey, many companies in Saudi Arabia are still unaware of the concept at all, which explains why the Saudi government decided to form a Social Responsibility Council headed by Prince Sultan bin Salman. The same is true for the country s insurance companies, some of which do not fully understand the concept of CSR. This was clearly demonstrated during a recent investigation, during which surveyed companies responded with puzzled queries, among them: What do we mean by social responsibility, and is there a difference between CSR and charity? This confusion explains, at least partly, the scarcity of social responsibility programs in the Kingdom. However, there were several insurance companies that were aware of the role and importance of social responsibility in achieving economic and social development. Towards a new concept To discuss the past and future of social responsibility and in particular how CSR can be adopted by the country s insurance companies we met with Dr. Murad Zuriekat, the Business Development Director at Arabia Insurance Cooperative Company, and Mr. Askar Al-Harthy, the Secretary General of the Social Responsibility Council in Riyadh. Social responsibility programs are carried out by the private sector and help strengthen society, Dr. Murad said. Such programs are not elective, but should be seen as part of a company s duty toward society and government. Dr. Murad says that the Saudi government has been generous in providing financial and moral support to the private sector, in addition to defending their interests before international trading blocs. As we call upon the security services to carry out their responsibilities, we call on the society s institutions, including the private sector, to carry out their responsibilities in promoting community safety and crime prevention, he said. Dr. Murad points out that an individual with a nuanced concept of corporate social responsibility should understand that every company must engage with shareholders, investors, employees, customers, suppliers, the community in which they operate in, and the environment in a responsible manner based on moral foundations, and transparent principles. In spite of the fact that the insurance sector in Saudi Arabia is still young, most insurance companies are offshoots of long-standing companies with deep roots in the country. Given this fact, Dr. Murad says it is not entirely excusable that there are so many insurance companies that have not in any meaningful way implemented or upheld the ideas of corporate social responsibility. Dr. Murad points out that, especially for a place with a religious core as fundamental as Saudi Arabia s, social responsibility should be a familiar idea. After all, this idea is at the heart of the Islamic principles. The first model of the Islamic nation and society in the era of the Prophet Mohammed, peace be upon him, is a great example that all fellow Muslims must pursue in all times and places, he said. The caliphs and the companions had applied the concept in various manners including in terms of politics, society, economics, and the environment. Even with these religious roots of social responsibility, some companies in Saudi Arabia see social responsibility as a strictly Dr. Murad voluntary initiative. Most agree, however, that a solid definition of corporate social responsibility is the one established by the World Business Council for Sustainable Development: CSR is the continuing commitment by businesses to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families, as well as of the local community and society at large. External and internal factors Understanding CSR requires both an internal and external view, Dr. Murad says. On one hand, CSR refers to the ethics with which an organization conducts itself with regard to its internal and external stakeholders both customers as well as employees. On the other hand, CSR refers to the way an organization conducts itself with regards to the environment and society in which it operates. Dr. Murad makes it clear he has considered both views. Arabia Insurance Cooperative Co. is part of the economic fabric of the Kingdom of Saudi Arabia, and must play its part in the service of this noble society, he said. Once we complete the development of all our departments and branches all over the Kingdom, we will be one of the supporters of CSR and a key provider of diverse insurance services. Dr. Murad says that although the Arabia Insurance Cooperative Co. does not at present have any specific social programs, the company will be unveiling specific initiatives in the near future. We believe that providing luxurious and high quality insurance services is a kind of social responsibility, Dr. Murad said. Certainly, we will be taking into account the social responsibility programs within the annual budget for the company, given that the company is part of the insurance industry in Saudi Arabia, and must play its role in this area. A profitable moral obligation While it may be true that private businesses have an important role to play in social and economic development around the world, Dr. Murad says that that the private sector is not a charity and that a company s chief concern is ultimately to achieve the highest return of profit to its owners. Balancing profit against social commitments is hard, he says and realizing that CSR can actually help a company make money can sometimes be even harder. But this profit can be put toward expanding infrastructure, promoting development needs, and distributing wealth to impoverished people in society. There is a need to remind companies about their social and ethical responsibilities, Dr. Murad said. They must ensure that profit is not linked to immoral or illegal practices such as child labor, inequality in wages, bad working conditions and denial of the basic rights of the individual. Moreover, the basic role played by the companies, being the main source of wealth, employment and modernization, obliges them to carry out their duties in accordance with the social and modern concepts. Beyond being a responsibility, CSR actually offers clear benefits both internally and externally to the companies involved in various projects, says Dr. Murad. Externally, CSR improves a company s image among potential customers and earns a company special respect from its competitors. It also creates short-term employment opportunities in that a company engaged in CSR will likely undertake various community-oriented projects such as the construction of parks and schools. 26 Shawwal 1430 October 2009 COOPERATIVE HEALTH INSURANCE 27

15 Essay Internally, a commitment to social responsibility cultivates a sense of loyalty and trust among the employees. This commitment also improves a company s operational efficiency and can lead to increases in quality and productivity. More importantly, social responsibility serves as a meaningful diversion from routine workplace practices and gives employees a feeling of satisfaction and meaning. As a result, Dr. Murad says, companies that commit to CSR often find that employees are more motivated and are thus more productive. Asked if there was competition among insurance companies committed to social responsibility, Dr. Murad says it is too early to know. Businesses mainly focus on profit-making, and improving the values of their stock, he said. But they are at the end social institutions and should exercise responsible citizenship by strengthening social stability and promoting a sense of belonging, which will eventually contribute to their success. Workers in the insurance sector are citizens first, and they have rights towards their country and community. Dr. Murad expressed frustration at the slow adoption of CSR among Saudi companies. All of us must contribute to the formation of a strong, consistent and healthy society, he said. We must move beyond intermittent corporate contributions to charity, and the seasonal support of non-profit projects, to adopt integrated social responsibility programs. Up to this moment there is no competition between insurance companies in this regard. Among Saudi Arabia s insurance companies, there may not yet exist a widespread and comprehensive commitment to social responsibility but many companies have begun to implement one form or another of social responsibility. Time will help crystallize a uniquely Saudi version of this concept, to be forged in the executive departments of those companies and to be implemented in society to such a degree that CSR is no longer just concept, but a reality. Study: CSR in Saudi Arabia The Secretary General of the Social Al-Harthy Responsibility Council in Riyadh, Mr. Askar Al-Harthy, says that social responsibility is still a new concept in Saudi Arabia, having gained attention for the first time here only five years ago. Al- Harthy admits that the pace of launching social responsibility programs is rather slow, but he says the council is helping companies in accelerating this pace, adding that many companies are already beginning to express a willingness to learn more about CSR and ways to implement related programs. Our goal is to spread the culture of social responsibility and clarify the fundamental aspects of this concept to all companies interested in implementing social responsibility programs, and to assist them in deciding how to start, Al- Harthy said. Al-Harthy says the Council is preparing a comprehensive study that will in part define CSR for Saudi companies and other interested parties. The study will include four chapters: The first will discuss different definitions of CSR; the second will highlight related policies and procedures; chapter three will include a field study about companies that have applied CSR programs; and the fourth chapter will suggest possible CSR programs. The study will be printed and disseminated to companies across the Kingdom, Al-Harthy says. We are working with companies free of charge, to strengthen the role of social responsibility in society, Al-Harthy said. Any company with a question about social responsibility may access our website and fill out a form with their requests, and we will reply to them as soon as we can. Concerning the insurance sector s adoption of CSR, Al-Harthy explains those organization s sluggish progress with the fact that 70 percent of insurance companies were only established within the last two years. Insurance companies are starting to invest in social responsibility, as they consider it a vital component for any organization to succeed and create a brand, Al-Harthy said. Some investors, for example, refuse to invest in companies that do not implement social responsibility programs. As a result, corporate social responsibility is beginning to be taken more seriously. Asked if there would be any sanctions imposed by the Council on companies without CSR programs, Al-Harthy said no. Social responsibility is voluntary work, not mandatory. Implementation depends on the company, so we do not impose adoption by force and will never do so. But we are counting on the insurance sector to play an important role in promoting CSR in the Kingdom and across the Arab world. Al- Harthy says that while preparing the study and looking to promote CSR, the council studied the positive experience of companies in Western countries that embrace social responsibility. He also pointed out that Saudi Arabia is ranked first among Arab countries in adopting and promoting the culture and the concept of social responsibility. Al-Harthy concluded by saying that Riyadh Chamber of Commerce and Industry will continue to play a significant role in embracing CSR, in that it is the organizer for the Corporate Social Responsibility Awards, which provide a platform to recognize and reward companies that have demonstrated true commitment, delivered outstanding results and impacts, and shown innovation and leadership. Swine flu: Why is no one targeting pigs? By Brigadier General Dr. Saleh Al-Tassan Scientists, research institutions, and the media must consider the theory that pigs are quite possibly the common denominator in recent deadly flu epidemics. Take the world s freshest outbreak: The so-called swine flu virus or H1N1 virus is said to be capable of mutating from one form to another, which makes it difficult to cure. And vaccine companies have so far been able to distribute only as few as 300 doses. It s a nasty virus. Most hospitals in the world, especially those in poor countries, have been unable to cope, just as several years ago they struggled to accommodate those infected with avian flu. The situation is so dire that calls have come for international health organizations to at least consider activating world-wide quarantine measures. More importantly, I want to argue, is the fact that scientists and academics should begin seriously considering the theory that the avian influenza epidemic was first incubated on pig farms. (This would prove the wisdom of Islam, which forbids Muslims from eating pork because pigs are considered unclean.) After all, pigs are a natural carrier of the influenza virus. In 1957, the spread of the H1N2 virus in pigs began in Europe. This flu was a combination of viral influenza and human influenza. A later variety, the H3N2 virus, which combines bird, pig and humans viruses, soon reached the United States. Most recently, the spread of avian flu was traced to chickens in China chickens that had been bred alongside pigs. The disease spread to the rest of the world, and as a result, more than 200 million birds were killed. But perhaps the real culprit the pork industry should have been the target all along? It is my contention that officials at the highest levels of scientific and academic institutions have failed to consider the possibility that pigs are the original source of avian flu and perhaps may have been a root cause of SARS, or perhaps even AIDS, which is commonly thought to have originated in primates. I now call upon doctors, researchers and research centers to carefully study H1N1 and attempt to battle the disease with every possible tool at their disposal. As they work, I also challenge them to consider all manner of causes for the epidemic including the role pigs may have played in the flu s development and its passage to humans. The spread of swine flu has already resulted in human and economic losses. But the role pigs may have played should not come as a total surprise. After all, some have warned that pigs could carry both bird flu and human flu, creating a situation in which the two flu viruses could combine, which in turn could result in a new virus capable of infecting humans. The problem is that so few scientists or institutions paid adequate attention to such concerns. Consider the facts: There are at least a few examples illustrating the danger of pigs to humans. In 1976, an American soldier was infected with swine flu, which resulted in a worldwide panic, for fear this new swine flu could spread as quickly and with as much deadly force as did the catastrophic flu epidemic of Then, in early 1977, a group of anti- Castro Cubans in cooperation with the American Central Intelligence Agency is reported to have smuggled an African swine flu virus into Cuba. The virus was reportedly placed in a box and transported by one of the Cuban agents into Cuba, where the fever is said to have spread, resulting in the deaths of an estimated 50,000 pigs but no human fatalities. Thereafter, pigs in Africa and the Iberian Peninsula were also found to have died, which resulted in the wholesale slaughter of a number of pigs but not before the virus is said to have reached Northern Europe. Even if few human deaths resulted, it is still no surprise that Western countries have since implemented strict procedures for animal importation. The worry in the late 1970s was that humans would begin to catch this new flu. All these years later, that s precisely what seems to be happening with H1N1. As a result, the prevention of future humanto-pig flu transmissions should be a high priority. Serious attention to the danger of pigs will be key to understanding how the current flu spread and how we can avoid the future role of pigs in the spread of flu pandemics. 28 Shawwal 1430 October 2009 COOPERATIVE HEALTH INSURANCE 29

16 Interview Al- Sudairy: By: Mustafa Shehab He describes the relationship between his office and the Council as transparent and independent, emphasizing that the accounting and audit industry in Saudi Arabia is doing very well. We met with Mr. Al- Sudairy to discuss the role SOCPA plays in the country, including the developing of accounting and auditing standards and monitoring the performance of legal accountants, among other duties. You are responsible of responsible for the legal accounting services at the Cooperative Health Insurance Council, how do you describe the relationship between SOCPA and the council? Our work with the Council of Cooperative Health Insurance is based on the complete respect of the Council and its work as a semi-governmental oversight agency. I must note that the council s financial system is based on business principles and it covers its expenses from the revenues of the health insurance sector. Of course, the relationship with the Council, as with any other body we work with, is based Abdulaziz bin Turki Al-Sudairy is a member of Saudi Organization for Certified Public Accountants (SOCPA), a member of the Advisory/Consulting Services Committee, and is responsible for the legal accounting services at the Cooperative Council for Health Insurance (CCHI). on the principles of transparency and disclosure and independence, and I stress transparency. How do you define transparency? If you searched for the word transparency in any dictionary in any culture, you will see that the word is always linked with honesty, sincerity and justice. In physics, transparent means easily seen through, or allowing light to pass with little or no interruption or distortion so that objects on the other side can be clearly seen. Transparency is a metaphorical extension of the meaning of transparent : that an object is one that can be seen through. It implies openness, communication and accountability. Transparency is the condition in which nothing is hidden: Prices, the volume of trading and other factual information must be available to all. Transparent procedures include open meetings, financial disclosure statements, budget reviews and audits. Why transparency and disclosure principles have became so important, why now? In recent years, transparency and accountability have become important themes in public financial management. Because they do not have the authority to obtain information directly from corporate management, many shareholders, investors and foreign companies depend on information published by corporations. It is no doubt that a lack of transparency or disclosure requirements could make the published data and the financial statements misleading, and this will reflect badly on the decision-making by the shareholder or the investor interested in such information and data. It could be argued that the bankruptcy of some companies, and the collapse of some financial markets, is due primarily to the lack of commitment to transparency and disclosure. Therefore, companies commitment to transparency and disclosure is the most important issue right now and has received more and more attention because of the worldwide economic crisis. Apart from the scientific definition to it, in economics and politics, transparency means creating an open environment that allows all information, data or methods of decision-making related to individuals or companies to be available to all. We should differentiate, however, between the initial disclosure and transparency, as the latter is more general and could be applied on various aspects of life, politically, socially and culturally. Corporate transparency requires the removal of all barriers to and the facilitation of free and easy public access to corporate, political and personal information, including access to the laws, rules, and processes that facilitate and protect individuals, shareholders and corporations. Companies can only withhold information if publishing such information will harm the interests of the company. In this case, information is permitted to be kept confidential. What about the independence of the auditors, how important is it? Undoubtedly, the key element of quality control (according to the Saudi Organization for Certified Public Accountants), is independency. We at SCOPA require all accounting firms to be purely independent when conducting their auditing. We assist auditing and accounting firms in implementing accounting policies, and we act appropriately to assure that these firms and their staff are completely independent. We reject any activity if we discover any violation of quality control. For SCOPA and the bodies we work with this issue is very important. How would you describe the accounting and audit activity in the Kingdom and its compliance with global accounting standards? The accounting and audit system in the Kingdom is performing amazingly. If you follow the achievements of the Saudi Organization for Certified Public Accountants, you will see that we have achieved many of our goals: 1- Accountants who have conducted a fellowship in SOCPA are now exempted from taking CMA and CIA tests 2- The International Federation of Accountants chose the SOCPA Secretary General as a member of federation s committee for developing countries 30 Shawwal 1430 October 2009 COOPERATIVE HEALTH INSURANCE 31

17 3- The International Federation of Accountants has asked SOCPA to review the Arabic content of their website 4- The International Federation of Accountants has listed SOCPA among the 16 international Certified Public Accountants bodies to have benefited from their experience in the improving of the accounting and auditing profession The insurance sector in Saudi Arabia is still quiet young. What is its financial situation? Despite the relative youth of the insurance sector, the growth rates are ranging between 15 percent and 20 percent and is expected to hit SR 56 billion by Taking into account the opportunities the sector is providing, I think the future of insurance in Saudi Arabia looks very good. Can an accountant or legal audit uncover fraud in companies financial figures? The procedures followed in reviewing financial figures and statements are based on the controls and standards set by SOCPA. Therefore, everything depends on this criteria, which will help in tracking any misleading information or misleading references. In the end, auditors can only give their opinion on the fairness of financial statements, they do not determine whether these statements are correct or incorrect. What are the regulatory standards applied by which the Ministry of Commerce requires accountants to ensure they abide by the country s regulations? The Chartered Accountants System has identified a number of controls to govern the issuance of license to practice the profession of accounting and auditing. The number of licenses issued from the period from 1976 to today is 390 licenses, while the number of cancellations for the same period has reached 221 permits. The system has also made Chartered Accountants take responsibility for errors they have made even if those errors were made unintentionally. The number of violations for the period from 1994 until 2007 reached 240 violations, including an escalating system that begins with conservation, blame, warning, suspension, and write-offs). SOCPA has also established quality control program to monitor the quality of professional performance. To achieve this, the authority prepared a set of quality control standards for accountants and established an accounting office monitoring program to check the performance of these offices. What role does SOCPA play in developing the accounting and auditing profession in the Kingdom? Article (19) states that the Saudi Organization for Certified Public Accountants will operate under the supervision of the Ministry of Commerce, in order to promote the accounting and auditing profession and all matters that might lead to the development of the profession and the elevation of its status. SOCPA key objectives are: Review, develop and approve accounting and auditing standards Establish the necessary rules for a CPA certificate examinations, including professional, practical and scientific aspects of the audit profession and applicable regulations Organize continuous education programs. Establish an appropriate quality review program in order to ensure that Certified Public Accountants implement professional standards and comply with the provisions of Certified Public Accountants Regulations and relevant by-laws Conduct special research and studies covering accounting, auditing and other related subjects Publish periodicals, books and bulletins covering accountancy and audit-related subjects Participate in local and international committees and symposiums relating to the profession of accounting and auditing Why did you choose this profession? There is no doubt that the accounting and auditing profession is the safety valve for the country s economy. I found fertile ground in Saudi Arabia for this profession, which has evolved significantly year after year and has achieved a leading status over other Arab countries and some developed countries. That is why I chose this profession; it is what I love to do. My name is Abdulaziz bin Turki Al- Sudairy, I have been working as a chartered account since 1409H. I am a member of the Saudi Organization for Certified Public Accountants and a member of the Consulting/Advisory Services Committee. 32 Shawwal 1430 October 2009

18 Cover Story Qualified Staff: An urgent need The necessity of training local staff for the insurance sector By: Faisal Al-Shaya Dr Abdul Karim Al- Nahdi: The insurance sector is one the fastest growing sectors in the Kingdom, particularly following the introduction of compulsory insurance regulations for nearly eight million residents. But as a result of this rapid growth, the Saudi market is now in dire need of trained and qualified specialists and staff to meet the increasing market demand on the nation s health insurance system. Hassan Abou El- Seoud: The shortage of qualified staff has forced insurance companies in Saudi Arabia to pay high salaries to secure local staff, which in recent years has led to exponentially higher wages for insurance professionals, as compared to those in other professions. Abdul Razak Idris: Medical insurance requires qualified medical staff who are able to understand, implement and guide patients toward the maximum benefit and the highest standard of treatment. Have you ever wondered where insurance originated, who was the first to be insured, and why? Medical insurance as we know it today is widely believed to have appeared for the first time in Europe in the 1600s, when craftsmen established collective funds. With the spread of industrialization and its related health risks, the security that comes with health insurance was soon sought by other professionals. Eventually, rather than workers having to pay for its themselves, employers began to provide medical insurance for employees, a move that found a huge level of support from labor organizations. Insurance in Saudi Despite its many years in the region, the insurance sector in this country in particular suffers from a shortage of the kind of qualified local candidates required by local companies. This is an especially frustrating problem for Saudi Arabia, given the fact that the government has recently implemented new regulations and elevated the role of regulatory bodies, setting the stage for insurance companies to grow for the benefit of citizens and residents. The problem is that companies cannot grow without good employees. Dr. Abdul Karim Al- Nahdi, acting Director of the claims department at Allied Cooperative Insurance Group (ACIG), discussed the situation. The insurance sector is one of the fastestgrowing sectors in the Kingdom, particularly following the introduction of compulsory insurance for nearly eight million residents. But as a result, the Saudi market is now in dire need of trained and qualified specialists and staff to meet the increasing market demand on the nation s health insurance system. He also says medical staff need to be trained in several areas, such as in cryptography, medical and public underwriting, claims reviewing, marketing of insurance documents, documentation and the detection of manipulated claims. Addressing the shortage of qualified staff requires a concerted effort from various institutions and agencies in the public and private sectors, including health insurance companies, providers of health services, hospitals and clinics, the Chamber of Commerce, the Health Insurance Council, and the Saudi Council for Health Specialties, he said. In Saudi, there are currently few options for insurance training. Al-Nahdi says that the availability of insurance training is now limited to a small number of local public and private educational institutions, including the Specialized Academy for Medical Training, the General Directorate of commercial education, the Institute of Banking, and the Community College at King Saud University in Riyadh. Across the region, meanwhile, institutions that provide insurance training include ones at the Kuwait Institute for Insurance, the Egyptian Institute of Insurance, and the General Authority for Health Insurance in Egypt. There is no specific period for the training programs, Al-Nahdi says, noting that requirements vary from one program to another and from one type of insurance to another. The training programs should also take into account the development of the insurance sector in each country and the needs of society. Another expert is Hassan Abu Al- Saud, the Director of policyholders in the Arabian Shield Cooperative Insurance Company. Mr. Abu Al-Saud believes that the region s lack of advanced capabilities in risk management and insurance results in a disproportionate reliance on international reinsurers in providing risk assessment and appropriate pricing mechanisms. He says imported pricing mechanisms are neither suitable for insurance or reinsurance companies, nor for the insured. These mechanisms, says Abu Al-Saud, are incommensurate with the actual and real factors affecting the sector. He says local companies, therefore, are subject to spontaneous non-balanced competition, which will lead ultimately to the instability of this vital and important market. The shortage of qualified candidates, according to Abu Al-Saud, has forced local insurance companies to seek staff in neighboring and global markets. Others have had to pay higher salaries to secure local staff, which in turn has led to exponentially higher wages for insurance professionals, as compared to those in other industries. The current situation is untenable. Required training Speaking about the knowledge needed to succeed in Saudi Arabia s insurance industry, Abu Al-Saud says many different areas of expertise are required. Working in the insurance sector requires comprehensive technical, statistical and mathematical knowledge in different areas, including in business, management, and engineering, he said. Candidates should also have a broad knowledge of different insurance operations, including marine, fire, engineering, vehicle, life and health insurance. There are various types of insurance courses that can be studied in many colleges and universities around the world, including in Arab countries, he said. Practical experience plays a vital role as well, and that is why you see that insurance companies are now contracting work from independent entities, such as insurance brokers, insurance agents, insurance advisors, value and loss estimators, arbitrators, and accounting experts. Who is responsible? In light of the dire shortage of qualified candidates in Saudi Arabia, the big question is this: Who should be responsible for helping develop 34 Shawwal 1430 October 2009 COOPERATIVE HEALTH INSURANCE 35

19 Cover Story specialized training urgently required by the insurance market? Abu Al-Saud says the situation is so urgent and complex that it requires the concerted efforts of various institutions and agencies in the public and private sectors, including policy makers, regulators, insurance companies, as well as further attention from other public and private institutions. He also says that academic administrators should begin to include insurance in school curriculum, in order to create a generation able to meet market requirements. Education officials, he says, should also encourage universities and colleges to begin offering majors in insurance, as well as helping to encourage non-academic training centers to begin providing specialized training programs to cover all aspects of insurance. The role played by decision makers in Saudi Arabia is vital in enhancing the participation of associations and organizations in providing the most needed training, he said, adding that the steps that can take include encouraging the adoption of high standards of regulation, providing consumers with detailed statistics and information on products and services, and raising the level of available services in order to attract new talent. What can be done? Abu Al-Saud says insurance regulators should being to address the shortage by taking the following steps: First: Determine the professional qualifications and accreditation requirements needed for the insurance profession, including relevant educational certificates and professional qualifications available for the insurance sector Second: Raise the standards of existing training programs and develop new programs that are both internationally accredited and appropriate for the local market. Additionally, organize specialized training programs to educate consumers so that they can learn which existing or new insurance products might be right for them Addressing the shortage of qualified staff requires a concerted effort from various institutions and agencies in the public and private sectors, including health insurance companies, providers of health services, hospitals and clinics, the Chamber of Commerce, the Health Insurance Council, and the Saudi Council for Health Specialties, Dr AbdulKarim says. Third: Encourage companies to provide regular and rigorous internal training for staff members. Regulators could help develop and expand such programs by monitoring budgets for in-house training at Saudi Arabia s licensed insurance companies. Abu Al-Saud says insurance companies should institute constant training of their staff. Such instruction should take place internally for instance, by implementing monthly training by qualified instructors and also externally perhaps by sending staff to international training centers with topnotch programs. Training should cover all types of insurance, not only the one or two types that the employees are dealing with directly, in order to give them a bigger understanding of the insurance industry in all its aspects, he said. Who s already doing what? The Saudi Arabian Monetary Agency (SAMA) plays an active role in providing training through its Institute of Banking Team, which has recently developed a distinguished training program called the General Certificate in the Basics of Insurance. This new program helps train professional staff in insurance, and joins a lineup of other specialized training programs that also offer high levels of professionalism and efficiency. Recently, there was a joint effort between the Bahrain Institute of Banking and Finance and the Chartered Insurance Institute (CII), in cooperation with the Central Bank of Bahrain, to introduce a qualification certificate that would be recognized internationally. By design the course would emphasize the regional market s special needs. At the same time, regulators in neighboring countries are beginning to coordinate with international institutes such as CII to approve exams and requirements for training programs in their countries. I must say that the future of the insurance industry looks promising, Abu Al- Saud said. A vision for training Abdul Razak Idris, medical insurance official for the Saudi United Medical Insurance Company, is more cautious. Before focusing on training, we must know first what is the role and nature of work the trained medical staff will play, he said. Idris says that, currently, to obtain medical insurance, an employer must apply to an insurance company that offers health insurance, and that the company then issues a document for health insurance in accordance with the Council s regulations. The insurance company should also issue a document for cooperative health insurance that includes services agreed upon with the holder of the document. Mr. Idris says these services typically include medical examination, outpatient testing, medical analysis, and prescriptions. To fulfill its commitment to its customers, the insurance company contracts with hospitals, clinics and any other medical service providers that are deemed necessary. In accordance with the wishes of their owners, insurance companies usually issue many different kinds of insurance policies, often more than the minimum limits on insurance types specified by Saudi law. As a result, companies must have on staff qualified employees who can manage and understand the needs of both customers and service providers. It is the responsibility of the medical staff to make sure that medical services have been provided to patients by service providers, whether these treatments are appropriate or not, and whether such treatments are covered in the insurance policy or not, Idris said. Medical insurance requires qualified medical staff in order to understand, implement and guide patients toward the best treatment, he said. They should take into account the cost of such services, to prevent any abuse by service providers, such as conducting medical tests unrelated to the illness or the patient s condition. Idris discussed which areas require specialized training. General insurance and medical insurance in particular requires skills and competence, he said. Health insurance requires training in the areas of marketing, development, sales and customer service, reinsurance, accounting, accounting, administration, and underwriting and claims. As we see it, Idris said, there are many facets of the insurance industry that require extensive training. The human factor plays a key role in the success or failure of an insurance transaction. There are other areas of expertise that insurance companies wish to develop in employees, including how to show personal interest in the beneficiaries, how to understand procedures set Working in the insurance sector requires comprehensive technical, statistical and mathematical knowledge in different areas, including in business, management, and engineering, Abu Saud says. by insurance companies, how to distinguish between the different insurance plans and how to evaluate the selecting of hospitals and other service providers, as well as conducting follow-ups. But it s not just insurance companies that need to keep their staff trained, Idris says. Hospitals and clinics should also provide training to their own staff members, he says. Service providers contract with insurance companies to provide the required services according to the insurance policy. This contract requires the insurance company and the service provider to exert their utmost effort to provide the best medical care and services to the patient. How long shall training last? Idris says that initial professional training in insurance usually takes three months after the completion of a degree in insurance. It depends on the individual s ability to absorb the conditions, rules and fundamentals of the insurance industry, he said. Then he or she should focus on one or one type of service that we have mentioned earlier. After that they need practical training or an internship, which could include the possibility of shifting the trainee or the staff member to field training, so as to enable him or her to understand the relationship between the company and the employer, he said. 36 Shawwal 1430 October 2009 COOPERATIVE HEALTH INSURANCE 37

20 Program Riyadh Care Hospital Specialized medical services in accordance with highest ethical and humanitarian standards Centers of excellence 1. Joints and spine center In the Middle East, thousands of people suffer from or are afflicted with some form of musculoskeletal ailment. Until recently, patients requiring specialized joint and spine care traveled to Europe or America for treatment. The launch of the Joints & Spine Center at the Riyadh Care Hospital, however, has changed all that. The center, in collaboration with U.S. surgeons, now offers a solid clinical practice coupled with tangible research and high-quality services. Specialties a. Joint replacement This unit is able to perform the most up-todate techniques to fix internal or external fractures, allowing early mobilization and ambulation of injured patients. All types of joint replacement are performed, though the main focus of the team is on hips and knees. Replacement of these joints has offered a solution to a major problem facing patients in Saudi Arabia. b. Spine surgery This unit has the ability to deal with the most critical pathologies affecting the spine, including prolapsed discs, spine fractures, spine stenosis, degenerative instability, spine tumors and infections, spine deformities and scoliosis. c. Knee arthroscopy and sport injuries Extensive knee surgery is no longer the only solution for injured Saudis. All injuries at the Riyadh Care Hospital are diagnosed and procedures are now performed arthroscopically. Such procedures include diagnostic arthroscopy, arthroscopic Menisectomies, arthroscopic ligament reconstruction, arthroscopic shaving and With the help of an elite group of American surgeons and physicians we can treat a wide variety of disorders affecting the musculoskeletal system. Al- Howar says. debridement, in addition to treatments to shoulder, ankle and elbow injuries. The Saudi government, under the leadership of the Custodian of the two Holy Mosques, has always given the health sector its highest priority, in order to provide all citizens with an excellent standard of care using the most modern and advanced services available. Such governmental support has enabled great advances in the Kingdom s healthcare field, which is so well-known that neighboring countries citizens often come to Saudi Arabia to seek specialized care. The Riyadh Care Hospital, also known as the Old Insurance Hospital, was established in 1991 and is one of the nation s leading private hospitals. It is dedicated to providing quality services to patients, in accordance with international standards, and is equipped with advanced equipment and technology, together with a highly qualified medical staff. In addition to its standard medical departments and technical units, the hospital also features two highly specialized medical programs known as Centers of Excellence that are headed by responsible and competent members of the medical staff who are well qualified and experienced in their discipline. d. Pediatric orthopedics Correction of limb deformities Correction of congenital hip dislocation Bone-lengthening procedures The Joint and Spine Center, a joint U.S.- Saudi cooperation between Riyadh Care Hospital and U.S. surgeons, aims to return patients to normal function as quickly and safely as possible. It offers: The highest levels of U.S.-standard experience in bones, joints and spine surgeries The latest techniques in the field of surgery High success rates of surgical operations Fully equipped operating rooms The latest world-standard systems for sterilization and infection control The Director General of the Riyadh Care Hospital, Abdurrahman Al- Howar: The Joints and Spine Center has relieved many patients from the trouble of traveling outside the kingdom to undergo complicated surgeries. The Joints and Spine Center is poised to fill the gap that exists within the joint and spine field in the region, said Dr. 38 Shawwal 1430 October 2009 COOPERATIVE HEALTH INSURANCE 39

21 Program Abdulrahman Al Howar, the Director General of Riyadh Care Hospital. With the help of an elite group of American surgeons and physicians we can treat a wide variety of disorders affecting the musculoskeletal system, including the care of fractures and injuries to tendons, ligaments, joints, bone and muscles. On staff are specialists in joint replacement, surgical spine care and rheumatology. The Joints and Spine Center has relieved many patients from the trouble of traveling outside the kingdom to undergo complicated surgeries, he said. Professor Abdulaziz Al Saigh, the Chief of Staff at the Riyadh Care hospital: The presence of U.S.-trained doctors who specialize in conducting complex and difficult surgeries in the field of bone and spine care is of great benefit to patients, local doctors, and the region as a whole. The joint cooperation between the Riyadh Care hospital and Americans surgeons is a great addition to the unique services provided by the hospital, because of the great and international reputation and experience of those doctors, said Professor Abdulaziz Al Saigh, Chief of Medical Staff at the Riyadh Care hospital. We try through the presence of this elite group of American surgeons to continue to provide assistance to all patients in accordance with international standards, he said. The presence of these U.S.-trained doctors who specialize in conducting complex and difficult surgeries in the field of bone and spine care is of great benefit to patients, local doctors, and the region as a whole. Infertility and I.V.F center The Infertility and I.V.F Center at the Riyadh Care Hospital offers a variety of treatment options for both male and female infertility. The center is fully equipped with the latest medical devices and its medial staff deals with each patient on case-by-case basis, while maintaining strict confidentiality. In a typical in-vitro fertilization (IVF) procedure, a woman is treated with fertility drugs to regulate her menstrual cycle and stimulate the development of higher-quality eggs. This process helps to ensure that a sufficient number of healthy eggs are available for fertilization. Eggs are then retrieved, or collected, and prepared for insemination using sperm from the husband. Fertilization occurs in a laboratory dish specially prepared with a culture medium that supports and nourishes the fertilized eggs. The joint cooperation between the Riyadh Care hospital and Americans surgeons is a great addition to the unique services provided by the hospital. Abdulaziz Al Saigh says. In order to monitor the response to different hormonal treatments and to track follicular development, physicians at the center will conduct ultrasound scans, blood tests, weight measurement, and blood sugar rates. The center has two laboratories that are fully equipped with the latest medical equipment. All developing embryos are cultured in a special medium, designed to help them develop and grow. There are generally two types of culture mediums used by laboratories: one is for initial embryo development (up to three days) and the second is for later development (up to the blastocyst stage). Embryos need to be cultured at a specific temperature to ensure survival. The temperature inside of the embryonic incubators is maintained at 37 degrees Celsius. The same temperature is found inside of a woman s womb. Intracytoplasmic sperm injection (ICSI) Intracytoplasmic sperm injection (ICSI) is an effective treatment for male infertility. Following egg retrieval, a single sperm is injected into each egg. ICSI is a very effective method to fertilization eggs in the IVF lab after they have been retrieved from the wife. IVF with ICSI involves the use of specialized micromanipulation tools and inverted microscopes that enable embryologists to select and then pick up individual sperm in a specially designed, hollow ICSI needle. The needle is then carefully advanced through the outer shell of the egg and egg membrane, where the sperm is then injected into the inner part, or cytoplasm, of the egg. The fertilized egg, or zygote, is then transferred to the wife s uterus with the intent to establish a successful pregnancy. Most importantly, the center also offers a very advanced system to ensure safety procedures within the laboratory, to prevent the mixing of samples. The electronic control extends to identifying the samples during the whole process of IVF, which gives the couple comfort, security and privacy. The center also contains two air-purifying systems, as the embryo laboratory is the only place where the sperm, the ova and the embryos are subject to the outside air. Therefore, Riyadh Care IVF with ICSI involves the use of specialized micromanipulation tools and inverted microscopes that enable embryologists to select and then pick up individual sperm in a specially designed Hospital installed those systems in order to achieve the highest degree of air purity in the laboratory as well as in its operation rooms. The system includes an integrated set of alarm systems to detect any problem in any of the devices dealing with the sperm, ova, embryos, chemicals, pharmaceuticals or frozen embryos. Preventive screening laboratory The preventive screening laboratory contains a fresh air cabin in which the samples of the husband s sperm are preserved. The cabin includes an advanced microscope link to a closed circuit television screen. It also contains an incubator for keeping samples of the husband s semen for in-vitro fertilization. There are centrifuges, a medicalgrade refrigerator for chemicals and pharmaceuticals, and a base for receiving the semen samples in cases of external fertilization (IVF) and ICSI. The laboratory features the latest equipments for frozen embryos, which must reach a temperature of at least minus-170 degrees Celsius. Frozen embryos are stored in a reservoir, which contains liquid nitrogen at temperatures of up to 196 degrees below zero, a scenario that enables the laboratory to store frozen embryos for years. The Riyadh Care Hospital is one of the leading hospitals in the Kingdom, as it provides specialized medical services in two important areas: bone diseases and treatment of infertility, in addition to medical services for other diseases. Not only does the hospital aim to provide the highest level of care, the Riyadh Care Hospital also hopes that by doing so, it raises the bar for other regional hospitals, each of which will some day increase their own level of medical services an eventuality that will in the end enhance the level of medical services for all of Saudi Arabia. 40 Shawwal 1430 October 2009 COOPERATIVE HEALTH INSURANCE 41

22 Finance & Investment Insurance marketing amid fierce competition The marketing of insurance products has become an important priority for the Saudi Arabian insurance sector, which itself has become one of the pillars of the national economy. After all, anything can be marketed effectively, and the basic principles of insurance marketing are the same as the marketing for any other product: Focus on the benefit to the consumer. With insurance, this is a message that can be delivered through direct marketing, the Internet or through banks. When an individual needs to address a personal need, he or she might visit the nearest store or perhaps ask the store to deliver the desired goods to his or her home. The situation is much the same with insurance policies. The trick with selling insurance is that companies need to inform people of the different types of insurance coverage available and the quality of the services that can be rendered. Like any market, the insurance sector consists of several parties, but the three most important categories are insurance and reinsurance companies, customers, and brokers and insurance agents. A consumers knowledge of insurance is usually limited to specific types of insurance, such as vehicle insurance, home or life insurance. In order to purchase such insurance, some individuals and companies prefer to deal directly with insurance companies. These consumers usually identify their insurance needs and call a number of insurance companies to find out the cost of premiums for each company. These consumers then choose what suits them. Others prefer to utilize the services of intermediaries, who may work for several insurance companies and are referred to as independent brokers. Such intermediaries might also work for just one insurance company and are referred to as captive brokers. Rather than contacting the company directly, an individual can thusly deal with intermediaries to know more about the available options, insurance coverage, insurance rates, or to request information about the best insurance companies in the market. Marketing No matter what is being sold or who is doing the selling, the basic principle of marketing is very simple: Focus on the person buying the product. In other words, a successful plan emphasizes the points of differentiation between one product and others in a market segment and then closes the pitch by taking into account the surrounding environment, economic activity, income, the change in individual tastes and any recent changes in government regulations. The logic behind marketing insurance to consumers is that everyone needs insurance, and that the market is saturated by many competing products. So what is the big benefit for taking insurance? It buys peace of mind. Imagine a pitch along these lines: Wouldn t you like to know that your family will be taken care of, if something happens to you? Another one is this: It s cheaper to buy insurance for your car than to get into an accident without it. And while you may be a good driver, can you be certain of everyone else? Both of these are straightforward ways insurance companies might market their products benefits to the end customer. A good marketing plan should include what marketers call the four P s of Marketing: PRODUCT: The actual product PRICE: The amount of money needed to buy the product PLACE: Where the product is located PROMOTION: Getting the product known. Market segmentation Market segmentation is a way to define and target specific markets, dividing a market into a distinct group of buyers who require different products. A key path to success in today s marketplace is to find subtle differences to give a business the marketing edge. Opportunities in marketing increase when segmented groups of clients and customers with varying needs and wants are recognized. Markets can be segmented or targeted using a variety of factors. Some bases for segmenting consumer markets include: Demographics (age, family size, life cycle, occupation) Geography (states, regions, countries) Consumer behavior (product knowledge, usage, attitudes, responses) Taste (lifestyle, values, personality) Beyond these factors, there are four common criteria used to segment a market: Similarity: the people in the proposed segment all share things in common Size: the group has to be large enough to generate sufficient sales volume at a low enough cost to result in a profit Measurability: the people between the segments should be different enough to be measurable Accessibility: there must be a way to reach consumers in every segment of the market Marketing strategies Today s competitive marketplace requires a strategy that insures a consistent approach to offering a product or service in a way that will outsell the competition. In addition to defining a marketing strategy, any smart company must also have a well-defined methodology for the day-to-day process of implementation. It is of little value to have a strategy if one lacks either the resources or the expertise to implement that strategy. A marketing strategy should be shaped most importantly by overall business goals. It should include a business definition, a description of available products and services, a profile of target users and clients, and a definition of a company s role in its relationship to the competition. 42 Shawwal 1430 October 2009 COOPERATIVE HEALTH INSURANCE 43

23 Finance & Investment Marketing plan A marketing plan details the actions necessary to achieve one or more marketing objectives. A good plan will include: A summary of the company s key objectives, classified according to their importance and impact for each segment of the market The overall objectives for the marketing plan, including a broad framework outlining the specific details of the marketing plan The incentives for purchasing a specific product from the perspective of the consumer, including the role of intermediaries who will be marketing the services of the company in the context of the general plan Define resources and development costs necessary to carry out the marketing plan Design suitable communication plans, both internal and external Identify suitable training programs, lectures and seminars to be given for personnel working with the intermediaries Design criteria to measure the success or failure in achieving the plan s goals, methods of follow-up and monitoring, and plans to deal with possible emergency conditions Outline a program to demonstrate how to coordinate between public programs and local communities efficiently and effectively, taking into account holidays and peak periods Marketing channels A marketing channel is the method by which the product gets into the customer s hand, either through direct sales, or through a reseller or an agent. Direct sales can occur in person, by phone, via the internet or regular mail. Indirect sales typically refer to sales through a broker or a reseller. Marketing channels include the following: Direct sales points General agencies Insurance brokers Insurance sales agents Modern means of marketing An insurance broker acts as an intermediary between clients and insurance companies. Clients may either be individuals or commercial businesses and organizations. Direct sales Direct marketing is attractive to many marketers, because in many cases its positive effect (but not negative results) can be measured directly. Some direct marketers also use media such as door hangers, package inserts, advertisements in magazines and newspapers and on radio, television or through , internet banner ads, digital campaigns, and billboards. General agencies An agent is a person or a company that is authorized to act on behalf of another (also known as the principal) to create a legal relationship with a third party. Succinctly, it may be referred to as the relationship between a principal and an agent whereby the principal, expressly or implicitly, authorizes the agent to work under his control and on his behalf. The agent is thusly required to negotiate on behalf of the principal or bring him and third parties into contractual relationships.the agent may be a bank or any person with experience in marketing who works for one or more insurance companies. Insurance brokers An insurance broker acts as an intermediary between clients and insurance companies. Clients may either be individuals or commercial businesses and organizations. Brokers use in-depth knowledge of risks and the insurance market to identify and arrange for suitable insurance policies. Insurance brokers, unlike tied agents, are independent and offer products from more than one insurer to ensure that their clients get the best deal. Sales agents Insurance sales agents, commonly referred to as producers in the insurance industry, sell one or more types of insurance, such as property and casualty, life or health. Such agents working exclusively for one insurance company and are referred to as captive agents. They earn a fixed salary and enjoy all the benefits of working in the company, in addition to commissions. Independent insurance agents represent several companies and match insurance policies for their clients with the company that offers the best rate and coverage. Normally such agents earn income only from commissions. Modern methods World insurance markets are increasingly developing more modern marketing methods. It is possible now to market your product using several methods, such as direct marketing, internet outreach or through banks. E-marketing The trend towards a greater reliance on modern technology is one of the most important features of the world today, with one of the main manifestations of globalization being the growing role of electronic commerce in the marketing of goods and services. In the most basic sense, e-commerce is the buying and selling of goods and services on the internet. The inability of insurance companies to respond to such changes and new methods especially in developing countries puts them in a weak competitive position compared to foreign companies that are more comfortable using such technologies. One chief problem is that, for the most part, developing countries still lack the physical infrastructure and human resources necessary to accommodate new technologies. For instance, most insurance services in developing countries find it difficult to sell their products electronically, whether because of internal or external technological inadequacies. Increasing the use of the internet and other e-commerce applications requires a combination of ingredients, including both economic and technologic development, in addition to the presence of advanced communication networks, which remain unavailable in most developing countries. Bank insurance marketing Marketing insurance through banks involves the rather powerful and basic The trend towards a greater reliance on modern technology is one of the most important features of the world today idea of selling insurance products at bank branches. In this arrangement, insurance companies and banks partner in such a way that a bank can sell insurance products directly to its customers. With a broad network of branches, banks can market various insurance products at one window, making it easier for customers to have one contact point. This is an arrangement that besides being mutually beneficial to the insurance company and banks will also benefit customers. Banking insurance benefits Purchasing insurance through banks has multiple benefits for all parties - insurance companies, banks and insurance agents. Some of the benefits include: New channels to market insurance products, reducing reliance on traditional channels and expanding the scope of financial services provided by banks. A decline in insurance expenses, resulting in the reduction of prices for insurance policies. Easy access to a new segment of the society the clients of the bank An additional means to increase banks income commissions, or fees for selling insurance products and policies The increased availability of insurance products commensurate with bank customers needs New insurance operations and an increase in the volume of insurance premiums Comprehensive services for bank clients, increasing customer trust and loyalty New, modern technology such as services via automatic bank machines, or ATMs An overall reduction in the cost of insurance services and policies 44 Shawwal 1430 October 2009 COOPERATIVE HEALTH INSURANCE 45

24 Technology DHS Arabia: A digital revolution for Saudi health insurance Given 18 months, the company that helps to process 50 percent of all health insurance claims in South Africa says it can streamline Saudi Arabia s systems DHS Arabia is a joint venture between Bytes Healthcare Solutions, South Africa s leading healthcare IT and ecommerce solutions provider, and Nasco Limited, a leading Middle East provider of telecommunication products and services. With decades of experience in South Africa, where the company services half of all insurance claims in the entire country, Bytes has learned the hard way how to help a growing insurance industry reduce the administration workload at service providers, medical insurance companies and third-party administrators (TPAs). Now they want to help Saudi Arabia. The idea, as Bytes Healthcare CEO Hennie Du Plessis explains, is that through utilizing DHS Arabia s switching software solution, everyone involved in the process in the Kingdom will be able to dedicate more time to the delivery of healthcare and spend less time on the kind of inefficient administration currently in use to process insurance claims. But first DHS Arabia needs to convince the already busy Saudi marketplace to adopt its technology. How big are DHS Arabia s ambitions? According to the company s corporate website, the company s goal is to be the healthcare switching solutions provider of choice for all role players in the Arabian health industry. Discussing the current state of the healthcare industry in Saudi Arabia, including his own hopes for its future and the ways in which DHS Arabia is likely to help, Du Plessis explains why he and his company just might succeed. You re offering something really sophisticated: an integrated infrastructure. What are the main challenges you re facing? Most certainly the growth of the industry itself is a challenge, because the insurance companies are in a phase where they are customizing their systems. So their primary focus at the moment is to get their own internal systems operational and adapted to their own business models. The challenge really is to compete with insurers other priorities for development time. As an example, an insurance company that is seeing very rapid growth of their member numbers might, if only in the short term, be a bit more concerned with administering their membership numbers rather than with the efficiencies they can get from processing electronic claims. This is understandable, because the Saudi health insurance industry is in a very early stage of development. Eventually, as we have seen in South Africa, competitive advantage stems from back-office efficiencies and quality of service to clinics and patients, and our business is ideally positioned to assist insurers with this. In South Africa we have seen claims processing costs drop by as much as 50 percent once an insurer starts to use our solution. Every insurance company that we have spoken to is very keen to engage in the electronic processing of claims, because they can see the benefits. But of course every business has only so many resources to make available. You re just planning? We are actually in testing phase. We have an implemented system at a particular clinic, and also at an insurance company The purpose of the pilot program is to demonstrate to the clinic and to the insurer that the value proposition we offer to them is in fact going to deliver the benefits that they are interested in. How do you compare Saudi technology to the outside world? Where do you see the gaps? I would say there s probably very little where the rest of the world has as a gain over Saudi. We all know at what rapid rate internet access and connectivity has grown all over the world, and this is also evident in Saudi. Mobile telephony has grown at a rapid rate, also in Saudi. So I can t think of anything where other countries really have a particular advantage over the Kingdom. Hospitals here often communicate with insurance companies through fax. It is exactly those opportunities for improving business processes that our technology will address. One of the principal value propositions that we bring to the market is for the hospital and clinic to have our switching solution integrated into their computer systems, so that when the patient calls at the front desk, the ability to do a membership and policy check with the insurance company or request approval for services would be a matter of routine. That is the glaring opportunity in this market, without a question. How does the DHS system work? The reason our technology works well is because many different types of healthcare providers are trying to make contact with many different insurance companies. Each healthcare provider uses a different computer system, and each of them wishes to communicate with twenty or thirty or even more as is the case in [South Africa] insurance companies, each with its own computer system. So compatibility of systems become a big challenge. What our solution does is to create for the healthcare provider community one destination to send to, and for the insurance companies, one source from where they will receive claims. In the process our system will receive the incoming message and translate it into the language required by the destination. It s about providing a single destination for claims to go to. That, I think, is the fundamental value proposition. On top of that we have developed quite an extensive series of validation technologies that will ensure the insurance company receives the claim with all data fields properly completed with valid data, therefore a processable claim, with no need for human intervention. The sophistication you re describing requires a lot of IT support. We will have made significant progress within the next 18 months, says Hennie Du Plessis. We work really closely with the software vendors who are contracted to the clinics and the hospitals, and also with the system developers at insurance companies, to make sure that we accommodate the business processes and work flow in their systems, so that electronic messaging becomes a seamless process for the end user. When we sign up a clinic or a hospital, we also offer training for the staff who will be using the system. Have you drawn up any plans in terms of human resources? We have a budget that tries to forecast the growth of the business. We know exactly what kind of resources we [need] to put into the business as the business starts to grow. The flag for appointment of additional staff will be the growth of revenues. In our business philosophy we tend to allow expenses to follow revenue, not lead revenue. There is a plan to hire Saudis, as per the Saudization levels required. Our thinking is that they would come out of university, rather than at a later stage. They will be properly trained locally or in South Africa. That knowledge transfer process is vital 46 Shawwal 1430 October 2009 COOPERATIVE HEALTH INSURANCE 47

25 to the success of our business. We re bringing knowledge and experience from South Africa, but we also have a lot still to learn about how business is done here in the Kingdom, and this is where NASCO is such a valuable partner. We need to utilize this knowledge and experience in Saudi Arabia and ultimately in the GCC region. But starting here and imparting some skills to Saudis to take our business to the next level is an important step. Are you planning to create some kind of network between the GCC countries? One of the requirements for our service to be reliable is that we have sufficient provision for business continuity. For example, if there were sufficient business in the UAE and sufficient business here, it would make sense for us to establish a switching operation in the UAE and one in Riyadh and to have those systems connect to each other so that we have some kind of fail-over security. When one switch is unavailable, the other would take its place. So what s the time frame you re setting for yourself to have things materialize here in Saudi? We will have made significant progress within the next 18 months. One of the areas of regulation that will certainly help the growth of our type of business is the extent to which the industry starts to use a standard system of coding for drugs, treatments and diagnoses. Without coding, electronic claims don t make a whole lot of sense. As soon as the regulators start to become more insistent on the use of coding standards in the industry, it will create a need in and of itself for electronic processing. We re encouraged about the future of this business, because we are seeing many signs of opportunities developing around us, certainly in Saudi, and increasingly also in the neighboring countries; especially in UAE where we have an office that looks after our interest. 48 Shawwal 1430 October 2009

26 Lifestyle the date one of the seven holy seeds, the others being barely, wheat, lentil, beans, garlic and onion. In Islam, date palms are mentioned in 20 verses out of 114. In one famous instance, the Holy Quran tells the story of Maryam, mother of Isa, who was experiencing the pains of childbirth in the middle of a deserted area, where she had sought shade and rest against a palm tree. Weak, hungry, alone and frightened, feelings of hopelessness gripped her to the point she wanted to die and be forgotten. It was then a voice cried out to her not to grieve, that her Lord had provided a water stream beneath her, that she should shake the trunk of the date palm tree and fresh, ripe dates would fall upon her. She reached for the trunk of the tree and shook. Dates came pouring down around her and along with the water beneath her, she received the sustenance needed to regain her strength physically, mentally and spiritually. As a result, Muslims all over the world break their fast with dates during the holy month of Ramadan, as did Prophet Mohammed, peace be upon him. (Many nutritionists even say that dates are a perfect food, as they are low in fat, high in energy and rich in minerals and vitamins.) Historians differ in determining the origin of the palm tree, according to an article recently published in Al-Jazeera. Some believed that the original home of the palm is the Arabian Gulf region, writes Mohamed Abdel-Karim Abdou, who cites an article by Ibn Wahsheya, one of the earliest writers on agriculture, who in turn had suggested that Harqan Island near Bahrain is the original home of the date palm. Others argue, however, that the tree was first found in Tarot, or Darren, in the Al Hassa region of Saudi Arabia. Saudi date industry The date industry is considered a robust and modern part of the world economy. In recent years, Saudi Arabia has worked to develop marketing channels in order to export dates and date-based products abroad. In , the Kingdom even established a specialized factory for date packaging in Medina city. A good-quality date is a delicious fruit with a sweet taste and a fleshy mouthfeel. Dates are high in energy and contain sugars and fiber that are suitable for both human consumption and for livestock feed. En route to your table, the fruit passes several separate stages of maturity, traditionally described by changes in color, texture, taste and flavor. Green dates (in Arabic, sobar) contain maximum moisture and are firm in texture. At the second stage (rutab), dates begin to lose moisture and the fruit becomes softer in texture. In the final, mature stage (tamar), the fruit contains the least amount of Muslims all over the world break their fast with dates during the holy month of Ramadan, as did Prophet Mohammed, peace be upon him The desert treasure not only has sustained life here but has become for Saudi Arabia what chocolate is to Switzerland For generations, life in the desert was sustained largely by the date palm, which furnished building materials, firewood and above all food. Over the centuries, the tree was crucial for the survival of Saudi Arabia s nomadic tribes. Today, the fruits of this tree of life continue to be highly valued as a local delicacy. Dates also have important cultural connotations concerning generosity, abundance and gratitude. There are more than 20 million palm trees in the Kingdom, which is considered the world s second-largest dates producer, after Iraq. Saudi Arabia produces nearly 400 different types of dates, but most of the Kingdom s annual production nearly one million tons is consumed locally. Origins and history The date palm is possibly the world s oldest tree and dates themselves may be the oldest fruit. Cultivated in the Middle East for more than 5,000 years, the tree of life is a fundamental part of the history of Mesopotamia, which today encompasses the modern nations of Iraq, Iran, Turkey, and Syria. Dates have been a staple food for thousands of years in this region and have always been traded widely. The date is also considered a royal delicacy: The fruit of Kings. In Christianity, Jesus used palm leaves as a symbol of peace, and Christians celebrate Palm Sunday with the tree s leaves just before Easter. Jews consider 50 Shawwal 1430 October 2009 COOPERATIVE HEALTH INSURANCE 51

27 moisture and maintains a soft texture and sweet taste. From the time of pollination, the fruit takes 200 days to reach the Tamar stage, when the fruit is fully ripened. After harvesting, dates are ready for processing, packaging or to be prepared for use in related products. The fruit is then stored in freezers at minus 20 degrees Celsius and at a high humidity of at least 70 percent. Date pectin, dietary fiber and syrup are just some of the date products that find applications as thickeners, gelling agents in processed foods, confectionery products, jams, table jellies, soft cheeses, and yoghurts. Dates can also be used in the production of enzymes and singlecell proteins, and in the production of hormones, antibiotics and yeasts. The trees are also used for furniture manufacturing, wood and paper production, and many other uses. When dates become dry, they are packed and marketed as dry and semi-dry dates. The packing of dry dates requires multiple steps, including weighing, examination, inspection, initial storage, washing with disinfectant, then washing with fresh water, processing, and then packaging, pressing and storing. Dates varieties The Bedouin Arabs lived off the date palm for centuries before the oil boom transformed the Gulf. To this day, the fruit remains popular, and is normally sold fresh or dried from huge piles stacked at vendors or in stores. There are more than 2,000 types of dates worldwide, with Saudi Arabia alone producing 322 varieties. Each region in the Kingdom specializes in producing certain types of dates, many of them famous in the region and some renowned in the rest of the world. A selection includes: Sukkari, Al Gosaimi, Nabitat Ali, Wannana, Nabitat Saif, Maktomi, Rushodia, Barhi, Hatami, Khalas, Salj, Safari, Saqi, Ajwa, Bakeri, Muneefi, Rabiya, Anbara, Safawi, Shalabi, Maktomi, Waseli, Bin Al-Sultan, Um Al Hamam, Um Al Khashab, Um Kubar, Barni, Haderiya, Sabeha, and Safra. In terms of annual productivity, 52 Shawwal 1430 October 2009 Khashram tree tops the list, with an average production of 255 kg; followed by the Shakel, with an average production of 220 kg; the Shahel and Safrai, both of which have an average production of 200 kg; the Waseli, with an average of 25 kg and finally the Ager, with an average of 15 kg. Local action, global reach Most of the Kingdom s annual production of over 700,000 tons is consumed locally or sent to Muslim countries as food aid. A small percentage is exported in bulk. Bateel, a firm that produces gourmet dates and date products, is determined to change that. The company aims to make dates to Saudi what chocolates are to Switzerland and cheese is to France. Bateel, which means young palm shoot, was established 15 years ago by members of the prominent Sudairi family. They began with dates from their private farm in Al-Ghat, a central area with an ideal climate and good soil for growing dates. According to Bateel s officials, the company s founder and director was inspired to open a date boutique while shopping for chocolates at a Swiss airport. He heard a woman saying how happy she was to be taking a piece of Switzerland back with her and decided there and then to create a similar role for Saudi Arabia s most delicious export. In addition to the basic fruit, Bateel also sells dates stuffed with candied lemon and pineapple peel, as well as almonds and marzipan. And for sheer decadence, there are dates dipped in Belgian chocolate, date cookies, date preserves and even non-alcoholic date champagne. Bateel s boutiques are modeled on the finest European chocolatiers, but with a distinctly Arabian touch, a model that other firms in the Middle East have emulated. Date delicacies Sweets made of dates are famous in Saudi Arabia, where the date has historically been both a major source of nutrition as well as a coveted delicacy. Usually offered after meals and at important social events and holidays, there are many types of such sweets, some of which are classics. Among those is the Chantilly, made of a sweetened whipped cream that is sometimes vanilla-flavored. The crème Chantilly, as it is called, is in turn blended with date paste and presented on a biscuit. At times, these deserts also feature peanuts, almonds or cinnamon. There is also the Crokan, a biscuit that looks like a finger, which is wrapped with dates and covered in pistachios, almonds and coconut. The Tamari consists of dates with layers of cream and chocolate, dusted with either sesame seeds or almonds and covered with a thin layer of cream. The date Tart, meanwhile, consists of a round biscuit upon which dates are arranged in a star, to which is added chocolate, pistachio, almonds or sesame seeds. The Dutch Klaija is a rectangular biscuit with dates in the middle, while the Tamara consists of dates, coconut, peanuts and chocolate. But the most famous sweet of all is the Mamoul cookie, which is usually reserved for special holidays. The Mamoul has three traditional fillings, which include walnut, pistachio and date. Jezan

28 Travel & Tourism Prague is one of the most beautiful cities in Europe. Set along the banks of the Vltava River, the city with its townscape of burger houses, palaces punctuated by towers, Baroque architecture and Renaissance cultural flourishes is a delight to the imagination. The capital of the Czech Republic and its largest city, Prague is situated in central Bohemia, is 600 kilometers from the Baltic Sea, 700 kilometers from the North Sea and 700 kilometers from the Mediterranean. For many decades, during the Gothic and Renaissance eras, Prague was the seat of the two Holy Roman Emperors and home to the kings of Bohemia. The city flourished during the 14thcentury reign of Bohemia King and Holy Roman Emperor Charles IV, who ordered the building of the New Town adjacent to the Old Town; construction of the Charles Bridge, which was erected to connect the new district to Malá Strana; design and compleltion of the St. Vitus Cathedral, the oldest Gothic cathedral in Central Europe; and the establishment of Charles University, the oldest university in Central Europe. Prague was at that time the third-largest city on the continent. The city currently has a population of 1.2 million people, and covers an area of approximately 500 square kilometers. The four independent boroughs that had formerly constituted Prague were eventually proclaimed a single city in Those four cities include: The Castle District, New Town, Old Town and Mala Strana. After Emperor Charles IV had all the city gates roofs covered with lead, Prague was dubbed the Golden City, and would remain one of the most influential cities in Europe until the 20th century. The official language is Czech, but residents also speak German and English, and their currency is the Koruna, and the dollar is equal to 22 Czech Koruna. Culture Prague has always been a city of immense cultural influence: Mozart wrote Don Giovanni here, the great Czech composer Antonín Dvorak spent most of his life in Prague, and legendary author Franz Kafka is one of the city s most famous sons. Architectural works from the Gothic period, High Baroque era and the rising school of modernism influenced the development of Central Europe, perhaps even all of European architecture. Even today, Prague remains one of the most prominent world centers of architecture, and the city famed for its magical atmosphere, monuments, culture, great food and excellent drinks invites you to its tiny medieval streets where you can touch and feel history. Any trip should begin with a visit to the city s 866-acre center, which has been registered since 1992 as a UNESCO world heritage site and boasts an impressive variety of architectural styles; including Gothic temples, Baroque and Renaissance palaces, Cubist houses and modern European architecture. The historic center of the old capital of the Czech Republic, which itself is more than ten centuries old, Prague attracts residents and visitors alike. The city is unique in that it features significant examples of Romanesque-style domes, Gothic towers, aristocratic-style houses, Renaissance palaces, synagogues, and Baroque Churches and monasteries sometimes on the same block! Prague is full of romantic towers and domes coated with gold. But it is also home to a School of Modern Art. A poet once described Prague as a symphony of stones. The architectural treasures of Prague are not just a testimony to its rich past but also a reflection of its present. Beyond just historical monuments, Prague the European City of Culture for the year 2000 offers rich cultural treasures, including museums, large and small galleries, theatres and concert halls. Prague is after all a living city, which can easily mix history with modernity, bringing together an unusual number of the world s oldest and newest examples of high art and culture. But Prague is more than high art and culture; it s also a diverse city of people enjoying life. Take a walk in the streets and narrow lanes under the light of gas lanterns, or sit under the trees in gardens and palaces, or perhaps take a boat trip around the city. This place can take you to a world of dreams. There s also the joy of standing above Prague, looking down to the attractive and impressive scenes of the city, which was dubbed the River of nine cups. Prague has also been called the City of 100 Towers, though the number of towers now exceeds 500. Visitors to Prague must also see the National Theater, the Old Town and Prague Castle. There you ll find shops selling antiques and gifts, such as the famed astronomical clock. Then there s the Mala Strana district, in which you ll find palaces, the Vichy Castle and the Charles Bridge. With a length of 516 meters, the Charles connects both sides of the Vltava River and connects Mara Strana to the Old Town. There are many coffee shops along the bridge. Other not-to-be-missed spots are Jusfov, the Jewish neighborhood in the city; Wenceslas Square; the trading hub of Prague; the National Museum; the Zizkov Tower, a TV tower built in 1985 to a height of 216 meters. The zoo is memorable as well, with cable cars that climb to the top of the mountain, where visitors can watch thousands of unique birds. Given its history, you might have a feeling you ve retuned to Roman times. There are a number of restaurants and coffee shops in the city, most of them located in the Mostic area. There you ll find two Arabic restaurants, Tunisian Court and Galilee Palestinian restaurant, but with high prices there are better options, such as the many Italian restaurants in the city. To make your visit even more pleasant, Prague has excellent public COOPERATIVE HEALTH INSURANCE Shawwal 1430 October 2009

29 Travel & Tourism transportation, including a metro, trams, taxies and buses. Rousine International Airport, the headquarters of Czech Airlines, receives about 10 million passengers annually and is just 15 kilometers from the center of the city. Accommodation Visitors to Prague can choose between three-star hotels, where room prices range from between US$70 to 90, four-star hotels, which range from US$100 to $120, or five-star hotels, which range from US$120 to $150. The most luxurious hotels in the city are Le Meridien, the Marriott, the Sheraton, and the Inter-Continental. It s also possible to rent nice, cheap villas in the suburbs of Prague, often for a nightly rent of between US$100 to $150. Those apartments are suitable for families, but the check them carefully before you commit. Climate The Czech Republic has a mild climate with warm, sometimes damp, summers and cold winters. The average temperature in summer is 24 degrees Celsius but at night, the temperature falls to 15 degrees. January and February are the coldest months, spring and summer tend to be the sunniest months, and the period between May and August is the rainiest. Snow is rare in Prague during winter, but due to the city s position so far north, in summer the day extends to approximately 17 hours, and it is advised to have light summer clothing and warm jackets in case the weather gets colder at night. Conventions Prague s architecture and historic buildings have lone attracted the attention of intellectuals and visitors interested in architecture. But recently Prague has also become one of the top convention destinations in the world. Prague is one of the safest cities in Europe. Many new hotels have been built, offering a wide range of conference facilities and modern services. The Czech Republic also enjoys the advantage of an ideal position in the heart of Europe. Nearly five dozen international flights are regularly scheduled for Prague, and the capital city has also become a major destination for budget airlines. As a result, visiting the Czech Republic is fast, inexpensive and convenient. Once there, it is easy to find places to accommodate 5,000 to 9,000 visitors, and as a result, the Czech Republic has hosted perhaps tens of thousands of successfully organized events. The balance between price and quality of service is one of the merits of Czech Republic convention tourism. Not only are the rates for holding a convention reasonable, but the service is excellent. This is especially true in the case of organizing a conference outside the capital, where prices are below the normal rate but feature the same level of quality. Security is of utmost importance in today s world of unexpected events. And Czech organizers place great emphasis on this important aspect. From a global viewpoint, it is a significant asset that the city enjoys a stable and safe environment. The rich list of cultural events is another reason to hold a conference in the Czech Republic, which is a real master in this respect. In particular, the capital city of Prague as well as other cities and towns offer a vast selection of daily concerts, theater performances and a wide range of sporting events. Visitors can attend luxurious gala concerts, enjoy vampire parties, watch shows in old factories, dine on Celtic banquets in old restaurants, or spend a night as James Bond. Prague may be one of the best preserved cities in the world, but there is no need to worry about the lack of modern conveniences. Malls, luxury hotels and modern conference facilities abound. Spas What if you want a bit of rest and relaxation? Wouldn t you like to get fit and have the feeling that someone Prague may be one of the best preserved cities in the world, but there is no need to worry about the lack of modern conveniences. Malls, luxury hotels and modern conference facilities abound is pampering you? Visit a Czech spa! You can choose from thirty resorts with hundreds of springs. The most important elements of a therapeutic Czech spa include naturally healing mineral waters, gases, and mud treatments. While some say that physical therapy first became popular in the fifteenth century, in the Czech Republic mineral springs have been in use of 2000 and are among the most famous in Europe. Physical therapy in the 16th century could be violent. Patients were required to stay in hot bath water for as many as 10 hours, as it was believed that the cracking of the skin would help in removing disease-causing bacteria from the body. The patient also drank as much as nine liters of mineral water per day. Myths and legends continue to surround certain Czech spa towns. For instance, women longing for a child visit the statue of Little Franz in in Františkovy park. If a woman touches the statue, it is said that she will give birth to a baby within a year. Spa resorts and towns often feature a nice climate, which adds to the splendor. In addition to treatment, people come to such locations for business meetings, wedding ceremonies, parties, health seminars, concerts, dance performances, and musical and theatrical performances. Major spa centers are located in sites near spring headwaters, which are often characterized by cleanliness. Many of those resorts are also located near forests, which also ensures fresh air another integral factor for any stay at a Czech resort. During treatment, therapists also help encourage a healthy lifestyle to overcome the effects of the living in the city. Additionally, most resort towns offer a wide range of cultural programs, which kick off the season of recreational activities in May each year. On this occasion, sacred ceremonies are held to maintain the healing force of a given spring. At one resort s celebrations, there is a march in memory of the founder of the city, King Charles IV. At the end of a trip to the Czech Republic, you ll be packing up your things overwhelmed with joy, relaxation but also sadness, because you ll be ending your stay. But stored in your memory are images and sensations that will endure for a lifetime. 56 Shawwal 1430 October 2009 COOPERATIVE HEALTH INSURANCE رجب 1430 ه / يوليو 2009 م

30 Report & Analysis Report: Gulf insurance market worth US$1.5 billion Islamic insurance market forecast to hit $7.7bn by 2012 Saudi Arabia s newly liberalized insurance market is poised for major growth. Though experts are optimistic about the long term they also predict that the next three to five years will be marked by intense competition. They say small businesses struggling to survive will continue to struggle, while a handful of big companies that already account for a growing share of the market will begin buying these smaller companies. The results could leave consumers with fewer options. Despite its modest size compared to other global markets, the Gulf insurance market occupies a special and competitive position in Asia and the Arab world. The global financial crisis, however, has affected the regional insurance industry as is the case around the world a development that has many executives in the Gulf insurance field embracing a cautious optimism when it comes to the next 12 months of the formerly robust insurance sector, according to a recent survey conducted by KPMG International and Economist Intelligence Unit. The survey, which was published in Al Eqtisadiya newspaper, says that more than half the respondents expect an improvement in organic growth (55 percent) and expect an improvement in growth by acquisition or take-over (53 percent) during the next 12 months. KPMG conducted their insurance survey of 315 industry executives from the Middle East and emerging markets in Asia Pacific and Eastern Europe. Concern over the impact of the weakened economy, and particularly the capital markets, is further evident in the increased focus that insurance companies are placing on risk management. In fact, 81 percent of respondents have increased the level of priority they place on market risk in the past 12 months. Credit risk has the next biggest increase in priority, according to 79 percent of respondents. While these were the largest increases in priority, at least two-thirds of respondents had increased the priority of all core business risks, including aggregation of risk at a firm-wide level, operational risk, economic capital risk, underwriting risk and stress testing. Both regulators and government agencies showed double-digit growth in terms of influence on company risk management policy and execution, with 65 percent and 32 percent of respondents respectively citing them as current major influencers. Senior management remains the single largest influence, according to 69 percent of respondents. Ratings agencies decreased the most, with their influence falling by half to 14 percent. The total value of the GCC insurance market is estimated to amount to as much as US$1.5 billion and is expected to reach US$1.7 billion in 2010, taking into account upcoming reconsideration of legislation and laws that govern the insurance sector in GCC countries, according to a recent report by the British Financial Services Center. That report indicates that Europe holds the largest share of the global insurance market, at US$68.1 trillion, followed by North American countries, at US$ 33.1 trillion, and the East Asian region at US$814 billion, including Japan at $US425 billion and South Korea at US$ 117 billion. The remaining US$272 billion is distributed throughout the rest of Asia, including the GCC countries, which occupie a comparatively modest share of the market, according to the report. The remaining US$19.1 trillion of the global insurance market is spread across Africa, Australia, and South America. The report anticipates that GCC countries will maintain current growth rates of 10 percent in the insurance industry for the current year. The report points out that since 2006, the GCC health insurance sector in particular has been the most significant contributor to the growth of the insurance industry. Also, many Gulf governments have begun to open the door to the private sector in order to invest in the insurance sector. Perhaps more importantly, many countries have changed the health insurance system from one that is voluntary to one that is compulsory. According to Dr. Abdullah bin Ibrahim Al-Sharif, Secretary-General of the Health Insurance Council in Saudi Arabia, among recent changes in the insurance sector are the raising of the daily health payment level to SR 600, the abolition of the maximum cost of medical coverage and increasing the benefits of pregnancy and childbirth. Moreover, insurance policies in the country now cover citizens of all ages. Since the implementation of the new insurance system, the number of the insured has reached more than seven million people, he said. The cooperative health insurance market is growing rapidly, with more than 25 licensed insurance companies. In 2008, the insurance market in Saudi Arabia witnessed strong growth, with gross written premiums reaching SR 10.9 billion (US$ 3 billon), up from SR 8.6 billion in In 2008, the total gross paid claims in Saudi Arabia reached SR 5.2 billion, an increase of 29 percent. The total number of insurance company employees in Saudi Arabia reached 5,447 in 2008, with Saudi nationals employed by insurance companies accounting for 45 percent of the total work force. Total health insurance premiums in 2008 reached SR billion, which represents an increase of 57 percent. All these figures are proving the strength of the Saudi insurance market and the determination of the Saudi authorities to build a strong infrastructure to keep this sector growing, Al-Sharif said. On a related matter, the Chief Executive Officer (CEO) of Tawuniya, Mr. Ali Al- Subaihin, said in a press statement that the company s operational performance during the first half of this year ending June 30, 2009 was strong even despite intense competition in the Saudi insurance market and the effects of the global financial crisis. He added that the compensation paid by the company to customers during the 58 Shawwal 1430 October 2009 COOPERATIVE HEALTH INSURANCE 59

31 first half of this year has increased by 28 percent, from SR 474 million in 2007, to SR 605 million in He pointed out that compensation rates vary from period to period, and that the increase in compensation during the first half of this year will not necessarily be achieved during the subsequent period. Recently, some regional economists have asked local companies to increase market competitiveness through mergers and acquisitions, and to consider the question of a radical remedy for the financial solvency of insurance companies by increasing the minimum capital of such companies, according to Al Sharq newspaper. Economists have argued that the Gulf region needs to establish a proportionally significant company that specializes in the field of reinsurance, as insurance companies in GCC countries are characterized by their close association with the global insurance market. This solution, economists say, can not be achieved only by the presence of foreign insurance companies in the domestic market. Instead, it requires the external flow of large reinsurance premiums that currently go to international companies outside the region. Returning to the British Financial Services Center report, that document says that the United States and the United Kingdom alone hold a 42 percent share of the global market, despite the fact that those two countries represent only about seven percent of the total world population. The emerging markets, on the contrary, represent more than 85 percent of the world s population but companies from those countries account for just seven percent of the global insurance market. According to the same report, the United States has maintained over the past decade its control of 30 percent of the global insurance market, while Japan s share declined from 25 percent to 10 percent. The United Kingdom s share, meanwhile, rose from 7 percent to 11 percent. In October 2008, the Fitch credit rating agency reduced its expectation concerning the levels of growth for the global insurance companies from stable to negative. The report also notes that life insurance premiums have increased by 6.12 percent in the developed economies, which constitute the bulk of the global insurance industry. The report concludes that the life insurance sector is indeed the dominant sector in the global insurance markets, as it accounts for about 58 percent of the insurance industry as a whole a percentage that amounts to US$1.4 trillion with expectations for annual growth rates by 2012 to range from 16 percent to 20 percent. The report notes that life insurance sales have a long way to go before they fully capture the GCC market. Despite high GDP levels, penetration of life insurance in the UAE, for example, is low, at about 30 percent, with expectations to reach 50 percent by This figure is similar to the rate seen in many other countries in the Middle East. Meanwhile, he report says that real estate insurance rates have actually declined in the first four months of Vehicle insurance, which is considered the foundation of the insurance industry and a key source of income in the GCC countries, has also witnessed a dramatic decline in sales. The overall performance of the insurance companies from different sectors showed a growth of 20 percent and 30 percent in the first quarter of this year. The Center concludes in its report that although the insurance industry is vulnerable to the negative repercussions of the credit crisis, in terms of assets, investment, and insurance coverage, companies in this sector are in a better position than banks, especially with regard to liquidity. Nevertheless, the insurance sector is linked to the turmoil in global financial markets in the last quarter of 2008, albeit indirectly. Approximately 15 percent to 20 percent of the sector s revenue is from investment income in the financial markets, and thus the credit crisis has limited or stopped the flow of income to the insurance sector, a fact that as a whole will make insurance companies more stringent with regard to risk management. As for uniquely regional insurance solutions, a new report by Ernst & Young says the total number of specialized Islamic insurance companies in the Arab world reached 57 firms, with premiums of as much as US$2 billion. The report estimates that the global market for such firms, known as takaful firms, will reach US$7.7 billion in 2012, a more conservative estimate than the preliminary estimates, which were published by the global investment bank HSBC, which anticipated the market to expand to US$14 billion by The Ernst & Young report says that despite ongoing challenges, the long-term outlook on fundamentals remains strong. Positive factors include shifting demographics and increased earnings, as well as a change in social attitudes towards insurance and growing consumption levels. The takaful industry as a whole has remained largely untapped, according to a GSN report, which also notes that Saudi Arabia remains the largest market for takaful regionally, followed by the UAE, Kuwait, while the markets of Bahrain, Oman and Qatar are almost equal. Finally, Solidarity, a member of the Ithmaar banking group and one of the largest takaful companies in the world, has received preliminary approval from the Saudi Arabia Monetary Agency (SAMA) to establish Solidarity Saudi Takaful Company, an associate of the Solidarity Group with an authorized and paid-up capital of SR555 million. 60 Shawwal 1430 October 2009

32 Wanted: A healthy South Africa With the legacy of apartheid s system of racial segregation, high incidences of AIDS and an inadequate public infrastructure, this African country is struggling to balance private plans and state commitments to insure the health of its 43 million people. Lying at the base of the African continent, South Africa covers 1.2 million square kilometers and has a population of more than 43 million, 35 million of them uninsured. Since apartheid ended in 1994, health care in the country has seen a promising and essential shift from racially biased, hospital-based care towards more easily accessible and comprehensive health care. But there s more work to be done; the ongoing struggle and one that is far from resolved is how to make the level of care available to the poor and uninsured come closer in quality to the service available to insured South Africans, who mostly attend private clinics and hospitals. The likely solutions are not easy or cheap but they are critical to the country s ongoing development. As of April 2002, the government spent the equivalent of approximately US$3.1 billion on 35 million people, while the private sector spent US$36.5 billion on just seven million. The discrepancy is telling. President Jacob Zuma s landslide The private sector, bristling with sophisticated technology, serves just 16 percent of the population, according to local reporter victory in April s general election was supposed to change this, featuring as it did a plan to move towards a National Health Insurance (NHI) scheme. But with the tumbling world economy meaning that state coffers are as lean as the pocketbooks of nervous voters, it has become less likely that a grand and expensive plan like NHI will come to fruition. The private sector, bristling with sophisticated technology, serves just 16 percent of the population, according to local reporter Hillary Bassett. She writes that there are more than 200 private hospitals, owned by individual physicians or large corporations. Private hospital beds number 24,537, public ones 110,143. Fees are generally split 50/50 between employers and employees. Private policies vary considerably in price, depending on their scope and the coverage percentage, but generally cost from US$142 to US$292 per month for a family of four, although costs are higher for comprehensive cover and the elderly. Public care, meanwhile, is funded with 20 percent federal funds and 80 percent provincial funds. As the government works to guide patients away from hospitals to its public clinics and community health care centers where free primary health care services are available there remains discrepancies in health spending between the nine provinces, with some rural ones actually cutting health budgets. Many also visit South Africa s 2,000 traditional healers, and there is a growing recognition of their value to society. Traditional healers, or sangomas, use a combination of plant and animal products, known as muti. Research is being conducted on the use of traditional medicines in curing malaria and tuberculosis. Problems Care available to those who can afford it is excellent: The United Nations ranked South Africa s private system 39 out of Around the World 162 nations for technological innovation and achievement. It s even good enough to spur medical tourism, with flights into South Africa carrying patients seeking operations, which are relatively cheap because of the country s weak currency. With such high standards, the chief desire among private patients is that healthcare become more affordable. Plan membership costs have continued to increase at annual rates far exceeding the inflation rate or wage increases since the 1980s. The high cost of medical schemes and affordability has meant the total number of beneficiaries has decreased since 1994, from 20 percent of the population to 15 percent, or about seven million people. In the current economic crisis, as many jobs are lost, there will be fewer and fewer than can afford insurance. The situation for public patients is more dire, as they struggle to battle povertyrelated illnesses such as tuberculosis, malaria, cholera, hepatitis B, and measles. Additionally, malnutrition affects up to 27 percent of children in South Africa, with as many as 2.5 million people malnourished and a further 14 million at risk. Finally, the problem of AIDS can not be overstated: There are 2.4 million HIVinfected people in South Africa, and that number grows every day. To stay healthy, the uninsured can turn to large, urban teaching hospitals, which offer good, if overcrowded, service. But that s only if you live in a city; despite a massive building program, many rural hospitals are run-down, with broken equipment, two patients per bed, and a shortage of basic medicine. Reporter Hillary Bassett writes that overall there is a dire shortage in public hospitals of radiographers, dieticians, physiotherapists, and nurses. She argues that because nearly 90 percent of doctors work in metropolitan areas, there is also a dire absence of doctors in remote areas (the ratio varies from 1:650 people in the Western Cape to 1:30,000 in parts of the 62 Shawwal 1430 October 2009 COOPERATIVE HEALTH INSURANCE 63

33 Eastern Cape) due to low salaries and a lack of infrastructure. On the plus side, Bassett says, more than 500 new clinics now stand in areas where formerly people used to walk seven hours for treatment. She also reports that the national rail carrier operates a healthcare train for many rural communities. Public V. Private University of California physician and health care analyst Sanjay Basu, M.D PhD, says that those advocating privatized health for poor countries often claim a clear path to success, because governmentsponsored programs have already failed despite decades of investment. This is fundamentally untrue, he says, pointing out that Asian countries that have built a strong public health system have done so very recently, with strong overall mortality reductions across all sectors. For instance, he writes, women in Sri Lanka now have nearly the same life expectancy as women in Germany, in part due to government-supported skilled birth attendants. Dr. Basu tackles another common claim about private health care: That it reduces costs and improves outcomes. In fact, he writes, private healthcare provisions in poor countries are generally associated with higher expenditures a problem writ large in the case of the wealthy but notoriously dysfunctional U.S. system. Dr. Basu s research indicates that countries with mostly privatized health systems spend about twice those with public systems, yet experience two to three times the infant and maternal mortality rates as the countries with primarily public health systems. Another fundamental problem, he writes, is that privatization has also reduced incentives to provide preventive health care, a public good for which few profitable testing or pharmaceutical fees can be charged. Upon privatization of parts of its health system, Dr. Basu writes, China s immunization rates dropped by nearly 50 percent, with subsequent rises in polio and measles both costly diseases from the perspective of lost work and wages. Increasingly, Dr. Basu argues, the evidence used to support health initiatives is based not on actual outcomes or population-level statistics, but on modeled constructs. Dr. Basu, whose research for his PhD focused on such models, says such numbers often focus on immediate benefits and costs, rather than taking into account the socalled down-stream consequences of disease and overall long-term health. The problem, he says, is complicated rubrics and models tend to be more easily managed by high-paid Western analysts who sit at desks, rather than extensive and real information gathered by local health care professionals with long-term commitments to actual communities. The Nhi The objective of South Africa s National Health Initiative is to put into place the necessary funding and health service delivery mechanisms that will enable the creation of an efficient, equitable and sustainable health system for all citizens of South Africa. NHI is proposed to be funded through a combination of current sources of government health spending, including the removal of tax subsidies for medical schemes and a modest mandatory or compulsory contribution by employer-employee contribution, which will be split equally. In the summer of 2009, the NHI received the critical backing of the board of the South African Board of Healthcare Funders (BHF). Humphrey Zokufa, the BHF s managing director, says that at the moment, insured South Africans pay an ordinary tax and then pay for their medical coverage separately. While it may hurt for the employed and insured to pay more each year to help cover the uninsured, Zokufa says, this is the only way everyone in South Africa will have health insurance. A reader of a South African newspaper recently expressed her reservations. With financing expected to be on the basis of those who can afford to pay subsidizing those who cannot afford, I wonder just how every hard-working person and already struggling business will be expected to make ends meet? It s a good question. But as is the case in the United States, where the government there is struggling to resolve its own health care mess, the fight to achieve a fair and equitable system is never easy. Back to the newspaper reader: The national health system in the UK might sound wonderful now, but it has taken 50 years to get to the point that it works as it does, which is not perfect. How can a health system that is already in crisis expect to completely turn around within six years? The sad fact is that health care in South Africa as in the United States is unlikely to be profoundly and completely fixed overnight. As with many of life s great struggles, a good outcome will probably come to those who are patient. But such is a bitter pill for actual patients to swallow. COOPERATIVE HEALTH INSURANCE July 2009, Issue 6 Mandatory Health Insurance for Saudi workers A step in the right direction Changing policies is a must for the successs of the mergers Representative of the Ministry of Labor in CCHI: People s satisfaction is difficult to obtain 64 Shawwal 1430 October 2009

34 Opinion We meet again Do we really need a health insurance? This is a question frequently asked by many experts, although for health insurance companies and professional the answer is very clear. Personally, I think the question has no definitive answer; some see health insurance as a necessity, while others insist that insurance is a waste of resources spending money on something that may or may not happen. Some have a valid argument especially when discussing the pros and cons. I am not here to give you an answer. I just want to say that the different types of insurance are important and necessary as the world is moving very fast and one cannot deny the occurrence of accident at any point of time. Insurance also plays an important role in sharing the risks of people in an affordable form. It helps the people to quickly recover from damages and losses. The less the income - which affects negatively the rate of inflation - the more we feel the need to preserve what we have because as it became is difficult to compensate the losses but at the same time it is not possible to avoid them. Insurance, in such cases, is one of the safest investments of now and the future. People may become ill. They may die of illness or accidents or their homes or other property may undergo damage or theft. So in all these cases and they have to face the loss of income or savings. Therefore, insurance is a manner of financially insuring that if such an incident comes about then the loss does not affect the present well being of the person. Medical bills from a minor accident can deplete your savings and force you into bankruptcy. Paying fixed the insurance premium costs each year, on the contrary, could be an essential financial service. In the end, I must note that all of us should be ready for the worst, even if it never comes. If insurance can save your family s future, so there is no reason not to do it. Mohammed bin Salman Al-Hussain Assistant Secretary General Financial and Admin Affairs Council of Cooperative Health Insurance IT SOLUTIONS FOR BETTER HEALTHCARE efficiency, quality, health 66 Shawwal 1430 October w w w. d h s a r a b i a. c o m

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