UAE: Spate of fires expected to fuel reinsurance premium hikes
Source: Middle East Insurance Review | Jul 2020
Reinsurance premiums may rise by 20-40% at the height of the summer, especially for buildings covered with combustible cladding, said industry players.
Given repeated incidents of fire incidents at buildings, towers, warehouses and other properties during the summer, foreign reinsurers are toughening their terms for underwriting technical risks for these properties, reported Al Khaleej.
One major fire was at Abbco Tower in Sharjah that was fitted with cladding that had been banned in 2016. Several people suffered minor injuries in the incident and more than 250 families were evacuated. The fire in the 48-floor building damaged 333 apartments.
United Insurance Brokers general manager Karim Jabri said the recurrence of fire accidents during the summer months pushed reinsurers to harden their terms in renewing reinsurance agreements with local insurers, pushing up premium rates by between 20% and 40% currently.
Gateway International Assurance managing director George Ashkar said the premium rates of insurance policies that cover buildings with combustible cladding are usually higher than for the non-cladding buildings because of the higher risk. M