This is going to be first time in three years
Motor insurance prices spike up after three years. UAE insurers will be forced to jack up premiums after claims pile up.
Motor insurance in UAE are heading for an increase in 2023. This is after three three years of decline and stability.
Insurance companies claim they have no room to cut corners on their motor portfolio.
There has been rise in repair costs and increased frequency of accident/damage claims compared to the Covid-19 year of 2020-21. The days of motor premiums being considerably discounted due to fewer cars on the road leading to lower claims are over.
The UAE insurers have solid – rather than spectacular numbers to show their efforts in the first six months. Motor related portfolios for most of the big players recorded steep declines because of claims.
Who will be hit?
The higher premiums will be most likely felt on entry to mid priced vehicles. This is where the biggest discounts had been offered in 2020-21. It was because insurers focused on getting vehicle owners to renew their policies.
Premium on a Toyota Corolla is around AED 830 mark, while Honda Accord is seen inching close to AED 1,000. For SUV’s AED 1,956 for Nissan Patrol, AED 1,711 for Toyota Land Cruiser as an average.
Some increases in the motor insurance in UAE will even be felt with immediate effect. This is because of the rising inflationary cost pressures.
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