Insurance companies in the UAE have raised premiums by up to 30 per cent in response to the unprecedented heavy rains witnessed in mid-April, reports Khaleej Times.
The surge in premiums comes after the UAE experienced the heaviest rain on April 16 in 75 years, leading to widespread flooding in areas such as Dubai, Sharjah, and Ajman. With vehicles and homes suffering damages during the downpour, insurance firms have been inundated with claims, some reporting up to a 400 per cent increase.
According to industry executives, demand for comprehensive insurance has also surged, with some firms seeing a 100 per cent jump in the post-rain period. Toshita Chauhan, business head of health and motor insurance at policybazaar.ae, noted a notable increase ranging from 5 to 20 per cent in insurance rates following the heavy rains. Chauhan stated, “Claims are higher as compared to the previous weeks by close to over 200 per cent,” particularly for saloons and sports/coupe cars.
Moin ur Rehman, executive director of Unitrust Insurance Broker, confirmed the rate hikes, emphasizing that motor and property insurance segments, especially in flood-prone areas, have seen noticeable increases ranging from 10 to 30 per cent.
Despite the surge in demand for comprehensive insurance, Avinash Babur, founder and CEO of Insurancemarket.ae, noted that there has been no immediate increase in premiums. However, Babur indicated that adjustments may be considered in the future, given the extensive claims expected.
Faisal Abbas, vice president for employment benefits and general insurance at the Continental Group, anticipates a potential increase in premiums by the third or fourth quarter of this year, reflecting the heightened demand for comprehensive coverage.
The surge in comprehensive insurance demand has been evident across both vehicle and property segments. Abbas noted that demand for comprehensive motor insurance has nearly doubled since the flooding incident, with a similar surge in the home insurance category.
Overall, the insurance industry is still assessing the full impact of the recent torrential rains, with a focus on evaluating claims and ensuring prompt support for affected individuals. While premiums have remained stable for now, future adjustments may be on the horizon to address the increased risks posed by such natural disasters.
