While Covid-19 is still with us, 2021 feels a little different to 2020, and like most people, life here at InsuranceMarket.ae has been getting back to a sense of relative “new normality”. With most of Dubai now well and truly open for business, and Expo2020 just around the corner, vehicles are back on the road, albeit those roads are quieter.
From 2020 until June 2021, overall minimum premiums were down by 30 per cent, whereas the increases now being seen are small and steady at around 10 per cent to 15 per cent. Talking money rather than percentages, average premiums for comprehensive car insurance pre-pandemic were around Dh1,700, whereas now they are around the Dh1,300 mark
Along with the upturn in vehicle usage, there has also been an upturn in car insurance premiums. InsuranceMarket.ae’s Motor Division has seen an increase in rates being offered by many motor insurers in Dubai, which isn’t a surprise. UAE car insurers, and the Insurance Authority, took a pragmatic approach during the peak of the pandemic in 2020: applying a “lower vehicles=less claims=lower premium” logic to the minimum motor premiums set. Getting back on the road means that some drivers will get back to making claims too, and with frequency of usage and cost of claims being two parts of the premium equation, it follows that we will get back to increased prices too.
Comfortingly, however, the increases we are seeing have been gradual, and mainly applicable to “low-cost/minimum premium” policies. Overall, it’s important to note that despite these increases, we are still not back to pre-pandemic pricing. From 2020 until June 2021, overall minimum premiums were down by 30 per cent, whereas the increases now being seen are small and steady at around 10 per cent to 15 per cent. Talking money rather than percentages, average premiums for comprehensive car insurance pre-pandemic were around Dh1,700, whereas now they are around the Dh1,300 mark.
As the economy picks up, all industry sectors will see upturns in prices and motor insurance is no exception. The good news is that as a regulated industry these upturns are steady and sensible, just like good driving should be!
