Media ININ Economy We Trust
Vehicle insurance prices have increased by between 10-20% since the beginning of this year 2023, driven by the increase in the population of the UAE and the need for many of them to own a new car in light of the local economic recovery, as well as the efforts of insurance companies; To compensate for part of its losses incurred during the past few years.
And two insurance experts explained that vehicle insurance prices have increased since the beginning of the current year 2023 at continuous rates, until they sometimes reached 20%, noting at the same time their continued rise during the coming period, in light of the growth in demand for the purchase of a “compulsory insurance policy”, especially On used cars, as the market witnessed an average increase in the purchase of insurance policies at rates of up to 20-30% since January 2023.
George Ashkar
Insurance expert George Al-Ashqar, General Manager of Gateway International Insurance – Insurance Agents, confirmed that the percentage of discounts granted by insurance companies to their customers and policyholders in light of the spread of the Corona pandemic, amounting to 50%, has been reduced to about 30-40%. This means an increase in the vehicle insurance rate from the minimum 10%.
Al-Ashqar added: Vehicle insurance prices in the local market are still competitive, and in many cases companies resort to the same policies that they applied previously, such as burning prices and deducting a market share from the premiums.
Al-Ashqar continued: With the imposition of the “Insurance Authority” for the upper and lower limits in 2017, the policy pricing mechanism was set between these two limits, so that no insurance company exceeds the upper ceiling, or even the lower one, to maintain a sound and safe policy in offering insurance products, including It maintains the shape of companies and the stability and growth of their profits.
Al-Ashkar pointed out that in light of the outbreak of the Corona pandemic, and many companies resorted, in line with what was approved by the “Insurance Authority” at the time, to grant discounts of up to 50% for many cases, this percentage was reduced from 50% to 30-40%, and this means An increase of 10-20% in the price of the insurance policy from the minimum level that was used previously.
Al-Ashqar explained: For example, an insurance policy sold in the market at a price of 1000 dirhams, and with the granting of discount policies that reach 50%, the policy became sold at 500 dirhams, and with the reduction of the discount rate to 300-400 dirhams, the insurance policy became sold at 600-700 dirhams. This confirms that the price of the insurance policy has increased by 10-20%, while the prices in force in the market are still below the minimum set by the Insurance Authority previously.
losses
Al-Ashqar said: In light of the financial results achieved by companies during 2022, and 9 insurance companies suffered large losses, many of these companies resorted to raising insurance rates since the beginning of 2023, to compensate part of their losses and preserve a small amount of profits in light of the competition policies in force in the country. market.
Al-Ashqar considered that the increase in insurance prices will not remain constant during the coming period, and all previous indicators and data indicate that insurance companies need a binding decision that pushes them all to impose a unified pricing mechanism and policy in force in the local market.
Strong request
Al-Ashqar revealed that the average growth in the purchase of vehicle insurance policies may reach 5-10% since the beginning of 2023, driven by the growth of the local economy, the commercial recovery experienced by the UAE markets, as well as the increase in the country’s population, adding: The growth rates for the purchase of used vehicle insurance policies are The most demanded, compared to new cars, given that receiving new cars takes several months before they are delivered to their buyers.
Al-Ashqar pointed out that the price of the car insurance policy is 1.5-2% of the total value of the new vehicle, after the rate was previously 3-4%, which the consumer does not like if the company decides to raise the insurance rate to the old price.
Reduce losses
Mark Pashaiani
In turn, Mark Pashayani, general manager of “buy any insurance”, confirmed what insurance expert George Al-Ashqar said, that vehicle insurance rates have increased by between 10-20% since the beginning of 2023, specifically since the beginning of last February.
Pashayani said: We have witnessed a rise in vehicle insurance prices by companies during the past few period, as companies resort to such a new mechanism in light of the losses they suffered in 2022, and they are trying as much as possible to sell insurance policies in any way and price whatsoever to carve out a market share and provide cash liquidity. she has.
Pashayani explained that the insurance prices in force in the local market are the same 3 years ago during the outbreak of the pandemic, and this prompted companies to adopt policies of burning prices and benefit from the discounts and bonuses granted by companies to their customers in line with what the Insurance Authority demanded at that time.
Pashayani gave an example of this increase, as an insurance policy for a “Nissan Tiida” car was sold for 395 dirhams, and it rose to about 475 dirhams, and in some cases to 550 dirhams, according to the benefits that policyholders benefit from in the insurance policy, knowing, The minimum price for the document “against third parties” is 785 dirhams.
Pashayani added: “Al-Shamel” prices also witnessed a 20% increase, driven by the same factors and previous reasons. He pointed out that insurance companies, national and foreign, and branches of Arab insurance companies, resorted to raising their rates during this period. Pashayani pointed to an average growth in the purchase of insurance policies during the last period by virtue of its compulsory nature, as well as the strong tourism movement witnessed by the UAE, which means pumping more vehicles into the local market.
