Premium rates for comprehensive and mandatory third-party liability motor policies in the UAE fell by between 15% and 18% in 2018 compared with 2017, according to the Emirates Insurance Association (EIA) and several managers of insurers operating in the UAE.
The decline in prices is attributed to increased competition among insurers, many of which sold mandatory third-party liability motor policies at prices that would comply with the minimum set by the authorities, reported Al Ittihad.
Mr Fareed Lutfi, secretary general of the EIA, confirmed that the prices of vehicle insurance policies in the UAE have declined by 15%-18% in 2018, the second year after the standard insurance policy system went into effect.
He said insurers are seeking to increase liquidity levels and maximise their market share by increasing sales, especially in the vehicle insurance and health insurance sectors.
Despite the current low motor insurance prices, he said price levels are healthy and sufficient to secure good margins for the sector. Insurers are also required to appoint an actuary expert to price products, and the actuaries have contributed to maintaining the sector’s profits.
Stable demand in many insurance branches has increased the keenness of insurers to reduce prices in the health and motor classes of business, said a senior insurance industry executive.
Most insurers are offering motor insurance at prices close to the minimum floor limits stipulated by the Insurance Authority.
He predicted that motor insurance prices will remain at the current levels this year, despite an expected increase in the volume of business in the sector with the introduction of many initiatives launched by the government.
The number of insurers offering motor insurance in the UAE is 48, while the total number of insurers operating in the country is 60. M