UAE: Insurers explain need for motor premium hikes
Source: Middle East Insurance Review | Sep 2024
The Emirates Insurance Federation, referring to hikes in motor insurance premiums, has said that it is natural for insurance companies to raise their premium rates to compensate for losses and to re-adjust their operations.
The federation also says that insurers have the right to raise the premiums to the maximum permissible limit, reported Emirates Today.
The statement follows complaints by policyholders, seeking to renew their motor policies, who said that compulsory motor third-party liability insurance premiums were raised by between 33% and 41%. The prices of comprehensive motor policies have also been increased by percentages ranging between 20% and 25% compared to 2023.
Some policyholders also said that they had been forced to purchase third-party liability insurance as comprehensive auto insurance policies became too expensive.
Automobile Committee of the Emirates Insurance Federation chairman Mohammed Mazhar Hamadeh, said, “Insurance companies have paid a lot of compensation recently, and some companies have losses. Therefore, it is natural for these companies to raise their prices to compensate for these losses and re-adjust their operations. They have the right to raise the price to the maximum permissible limit for the policy price.”
He said that the motor insurers in the UAE compete within the minimum and maximum price limits set by the regulatory authorities.
He added that in previous situations, insurance companies had offered discounts and lowered their prices, and there was great competition in the market. “But the situation is somewhat different now, and there is an urgent need to raise prices according to market conditions and to seek to achieve profits,” he said. M