UAE: Motor insurance premium rates of many insurers fall to floor limits
Source: Middle East Insurance Review | Aug 2022
The auto insurance market, comprising third-party liability insurance and comprehensive insurance business, saw a number of insurers report a 20% decline in premiums during the first half of this year, compared to the corresponding period last year, according to the Emirates Insurance Association (EIA).
Officials and executives in the insurance sector confirmed that car insurance prices have reached the minimum limits set for motor insurers that grant the maximum permissible discounts. The low prices are attributed to the intensified competition in the sector, reported the newspaper Al-Ittihad.
The number of insurance companies that offer motor coverage is 48, of which 40 insurers are offering motor premium rates at or close to floor prices. This compares to only eight that maintain higher prices.
EIA secretary-general Fareed Lutfi told Al-Ittihad that the decrease in premium rates applied by most insurers ranged between 12% and 30% during the first half of this year compared to the corresponding half last year. He added that the EIA would be discussing the pricing process for auto insurance with insurers.
A member of the EIA’s automobile insurance technical committee said that small insurers are leading the price declines. They strive to cling to market share in motor insurance to make up for slower demand in some other classes of insurance.
Since the beginning of the COVID-19 pandemic in 2020, motor insurance premium rates have fallen by an estimated 40%. M