The insurance industry bore the brunt of the costs of the April 2024 floods in the UAE, according to S&P Global Ratings (S&P). The disaster, though, had limited financial impact on the banking sector.
S&P assessed recently published insurance sector data by the Central Bank of the UAE (CBUAE).
Insurance companies covered most of the insured damage to vehicles, homes, and buildings, as per their contractual obligations and the CBUAE directive to take responsibility for the indemnification of the insured damage.
In 2024, gross paid claims by insurance companies in the UAE rose by about 32% to AED41.6bn ($11.3bn), according to CBUAE data.
More specifically, gross paid claims for property and liability insurance increased by 82% in 2024, reaching AED13.7bn. Of these claims, 54% were in Dubai, where most damage occurred. Paid claims for motor insurance rose by about 62%, accounting for the bulk of the gross growth.
The S&P report said, “The insurance sector demonstrated resilience to the significant rise in claims in 2024. This was thanks to favourable investment returns, a substantial increase in premiums—particularly in motor lines—and the ceding of most flood claims to international reinsurers.”
Government support in the catastrophe accounted for less than 1% of the UAE’s GDP, which stood at AED1.77tn in 2024.