UAE: Insurers saw 20% decline in motor premium rates in 1H18
Source: Middle East Insurance Review | Nov 2018
The prices of motor insurance in the UAE fell by 20% in the first half of 2018 compared to the same period last year, Mr Ebrahim Obaid Al Zaabi, director general of the UAE Insurance Authority (IA), has said.
Speaking at a briefing on the effects of the standardisation of the motor insurance policy in 2016 and its amendments in 2017 on the auto business, Mr Al Zaabi said the insurance sector would continue to grow over the long term as a result of the development of legislation and the full implementation of regulatory directives starting in 2018, which aim to strengthen the solvency of insurers.
He said the IA had taken steps to evaluate the implementation of the 2016 regulations, including the formation of a field monitoring and analytical monitoring team to determine the extent to which the market applied the tariff system. The results of the study showed that prices have been stable for third-party liability motor insurance policies as well as for comprehensive insurance.
Insurers can offer motor premium rates below the minimum tariff rate for those with clean traffic records, according to Mr Al Zaabi.
He said the most important outcome from the standardisation of vehicle insurance policies has been the decrease in the number of complaints received by the IA.
The pricing regulations were introduced in 2016 to prevent severe undercutting among insurers that had led to huge financial losses for them. The amendments to the vehicle insurance tariff system, which came into effect in early 2018, include changes to the minimum tariff for motorbike insurance. The new rules also provide for a replacement car for the insured in the event of an accident; settlement of claims within 15 days of the receipt of required documentation; and reducing premiums for accident-free drivers each year, among several changes.
Mr Al Zaabi said the number of complaints received from policyholders during the first half of 2018 decreased by 41% to 2,931 compared to 4,950 in the same period of 2017. In addition, 98% of the complaints were resolved between the insurer and the insured, while 2% were taken to court. M