Insurance companies in the UAE have raised the prices of comprehensive motor insurance policies during the first half of the year by a percentage ranging between 20% and 25% compared to the corresponding period in 2023, according to Mr Saeed Abdullah Al Muhairi, CEO of United Gulf Insurance Brokers.
Mr Al Muhairi expects insurance prices to continue improving, which would positively reflect on the technical results of companies.
Industry players attribute the premium hikes to the economic recovery, the growth in demand for new cars, and the rise in reinsurance prices and conditions, according to a report by the newspaper Al-Etihad.
They said that the higher insurance premiums open the way for insurers to achieve good technical profits, and contribute to improving the quality of service, and increase the ability of insurance companies to fulfill their duties towards policyholders, agencies, and repair shops.
Mr Al Muhairi said that the premium hikes are taking place against a backdrop of price corrections after a wave of sharp declines during the COVID-19 pandemic during which many insurers granted discounts of up to 50% on the premium of a policy.
The Central Bank of the UAE also requires insurance companies not to sell motor insurance for less than the minimum limits stipulated in the unified motor insurance policy, as well as to stop granting a 50% discount on the minimum limit.
Mr Arvind Kashyap, CEO of Newtech Insurance Brokers, said that despite the increase in insurance premiums, they are still within acceptable levels for customers, and there is still room for further increases in insurance rates as insurance companies renew reinsurance contracts at higher rates and new terms.