Record Rainfall in UAE Leads to 400% Surge in Car Insurance Claims

Photo : Reuters

Insurance companies in the UAE are facing an unprecedented surge in claims following the heaviest rainfall the country has experienced in 75 years. With damages totaling hundreds of thousands of dirhams, the aftermath of the record-breaking rainfall has left insurers grappling with an overwhelming influx of claims from various sectors.

The deluge of claims spans across a multitude of industries, with a significant portion stemming from motor damages due to the adverse weather conditions. Avinash Babur, CEO of Insurancemarket.ae, reported a staggering fourfold increase in claims compared to previous rainy periods. The surge in claims, primarily related to vehicle damages, has pushed insurers to their limits as they strive to address the needs of policyholders during this critical time.

In addition to motor damages, claims related to water damage and electrical issues at homes, as well as retail outlets, restaurants, and small retailers, have inundated insurance companies. The severity of the rains has led to unprecedented levels of claims, with industry experts estimating a surge of up to 400% compared to previous peaks.

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Anas Mistareehi, CEO of eSanad, echoed concerns about the magnitude of the claims, anticipating that this event would result in the highest number of claims ever recorded from a single weather event. The surge in submissions spans various categories, including motor, property, projects, and construction, reflecting the widespread impact of the rainfall.

Moin ur Rehman, executive director of Unitrust Insurance Broker, highlighted the significant increase in motor insurance claims, particularly from shops and restaurants affected by flooding. The aftermath of the rains has seen an influx of claims related to vehicles stranded on flooded roads and water leakage issues in homes, necessitating immediate attention and assistance from insurers.

While insurers are equipped to handle such situations, the widespread flooding will inevitably lead to significant insurance claims arising from property damage, motor issues, and business interruptions. The reliance on reinsurance to mitigate losses will help alleviate some of the financial burden on insurers, but the unprecedented nature of the event is expected to exert pressure on earnings, especially for smaller insurers.

As insurers navigate the aftermath of the historic rainfall, the industry braces for challenges ahead, with expectations of heightened reinsurance prices and renewed focus on profitability in the face of ongoing market competition and soft prices.

April 22, 2024 11:34 a.m. 10620

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