United Arab Emirates: Auto Insurance Claims Up 45% As Extra Autos Get On The Street – Khaleej Instances
Prices are similar to their pre-Covid values as the economy opens up and residents return to their offices.
Auto insurance claims have risen in recent months, hitting pre-Covid-19 levels in 2019 as the economy opens up and UAE residents return to their offices, leading to more vehicles on the roads.
A new study found that the trend towards fewer accidents and falling insurance claims that began after the outbreak of the Covid-19 pandemic last year is now reversing. The study carried out by RSA Insurance and RoadSafetyUAE found that claims ratios in motor insurance have increased by almost 45 percent in the last few months compared to the months of Covid-19 and have now reached a level similar to 2019. This upward trend is expected to continue in the coming months.
In line with the decline in the number of traffic accidents during Covid-19, car insurance claims had decreased by around 60 percent.
The study found that claims based on driver wrongdoing, such as overspeeding and insufficient distance between cars, accounted for a large portion of the damage – around 40 percent – in recent months and that the main causes of accidents and damage are preventable.
“Many countries are still introducing restrictions to control and contain the spread of Covid-19 and its variants. The United Arab Emirates are recognized as one of the first countries in the world to resume similar economic activity. Therefore, this trend towards rising auto insurance claims is likely to be a reference for other markets, ”said Sunita Pais, Head of Claims at RSA UAE.
"In addition, it is likely that many UAE residents will stay in the country this year, as many countries are still imposing severe travel restrictions, which could increase road accident rates," Pais said.
The UAE insurance sector is one of the most competitive in the Gulf region due to the presence of numerous companies. The UAE is home to the second largest Islamic insurance market in the GCC. According to S&P Global Ratings, premium income in the market will remain unchanged in 2021 due to continued pressure on car and other tariffs. A pickup in tourism and the launch of the Dubai Expo in October 2021 could generate additional business, but believes that some of the larger conventional insurers will benefit more than many of the smaller Islamic insurance companies.
Pais warned motorists to be more vigilant while driving as midsummer approaches and tire problems are more common during these months.
Pais urged customers to be careful when purchasing insurance, as intense competition between insurers can mean that some products do not provide adequate insurance coverage.
Thomas Edelmann, Founder and CEO of RoadSafetyUAE, said insurance companies have huge amounts of data that can play an important role in understanding accident patterns.