Senior executives and directors of insurance brokerage firms expect a 10% decline in the average motor insurance premium rate during the current year, compared to last year.
The fall would be a result of good financial results recorded by insurance companies, intense competition, and regulations issued by the Insurance Authority regarding granting discounts to specific categories of drivers, which allow companies to lower their pricing, reported Emirates Today.
On 22 April last year, the Insurance Authority issued regulations enabling a discount of up to 50% on the minimum insurance premium to vehicle owners when renewing or issuing new motor insurance policies for certain categories of customers, including workers in the medical sector, members of the army, police and civil defence, people over the age of 60, as well as drivers with an accident-free record.
Mr Saeed Al Muhairi, CEO of United Gulf Insurance Brokers, said that auto insurance rates have declined significantly since the middle of last year, pointing out that the financial results recorded by insurance companies during the past two years in the vehicle insurance sector were good, which prompted insurance companies to revise their prices.
He also said that the marketing policies pursued by insurance companies in the motor business indicate a continuing decline, pointing out that most insurers seek to provide competitive prices in the market at present.
Mr Al Muhairi told Emirates Today that, in competing against one another, insurers increased the commission rates for insurance brokers to reach 20% and 25% compared to 15% previously.
For his part, Mr Moussa Al-Shawahin, executive director of My Partners, an insurance and risk management consultancy, indicated that COVID-19 traffic restrictions during the past year, and the fall in the number of car accidents, will positively affect insurers' financial results for 2020.
He stated that insurers will seek to retain their customers, and thus they will be forced to reduce prices, especially given that a large percentage of insurance companies are engaged in such a move.
He expects motor insurance premium rates to decline by between 10% and 20% this year.