In the wake of record-breaking rains in the UAE on April 16, insurers in the country have been forced to reassess their risk models and adjust their premiums accordingly. The unprecedented storms led to significant damage to cars, homes, and businesses due to widespread flooding, resulting in a surge of claims for insurance companies. Some insurers have already raised premiums for new policies to reflect the increased risk, while others are still considering adjustments in the near future. Rates for natural catastrophe coverage have reportedly increased by up to 50 per cent following the recent weather events.
Industry executives have noted a rise in natural disaster premiums, with increases ranging from 10 to 20 per cent on average for policies that include this coverage. Car insurers, in particular, have seen rates go up by 20 to 50 per cent since the heavy rains hit the country. The changes in premiums are expected to continue to rise, with some insurers still in the process of evaluating their rates. Policyholders are advised to contact their insurers for detailed information about any adjustments to their premiums.
Insurance experts have observed a steady flow of claims following the recent floods, with most claims coming from the auto segment. Insurers are currently facing challenges in processing claims due to the overwhelming volume of cases. Flood damage repair approvals may take longer than usual, with delays in assessment and approval stages. The high occupancy rates of garages and repair workshops have further extended the timeline for completing necessary repairs, leading to an overall increase in settlement periods.
Despite the challenges being faced by insurers and repair shops in managing the surge of claims, efforts are being made to expedite the process as much as possible. Delays may occur due to capacity constraints in garages and waiting for approval from other insurance companies, especially in multi-vehicle incidents. However, it is expected that the bottleneck will gradually ease over the next few weeks as insurers work to address the backlog and streamline the claims process for policyholders. With the increasing demand for natural calamities coverage, insurers are likely to continue adjusting their premiums to reflect the heightened risk in the region.
