UAE insurance providers have reported a considerable surge in claims following the heaviest rainfall in 75 years, with some firms experiencing spikes of up to 400% compared to previous peaks, primarily attributed to vehicle damage.
Likewise, claims amounting to hundreds of thousands of dirhams have been submitted by eateries, stores, and other small businesses in the days following the rainfall.
Avinash Babur, CEO of Insurancemarket.ae, stated they have received four times more claims compared to previous rainy periods.
“Policyholders will need to bear with us as we try our best to serve them during this critical time,” said Babur.
Claims related to water damage and electrical issues at homes, as well as retail outlets, F&B, and offices, are also significant, added Babur.
Anas Mistareehi, CEO of eSanad, also anticipates unprecedented levels of claims due to the severity of the rainfall.
“Despite having sophisticated infrastructure in place, the intensity of the rainfall has been overwhelming, leading to an exceptional situation. We will likely see the highest number of claims ever recorded from a single event,” he said.
Mistareehi estimated a minimum surge of 50 per cent in claims compared to the last event.
Mistareehi emphasised that the surge in claim submissions was across various categories such as motor, property, projects, and construction.
“Insurance companies are predominantly receiving motor claims due to the significant number of vehicles on the roads during peak rainfall.
Moin ur Rehman, executive director of Unitrust Insurance Broker, echoed his industry peers, saying, “The UAE has witnessed its highest rainfall in the last 75 years, and the impact on insurance claims reflects the severity of the weather event. The surge in claims surpasses any previous instances we have encountered, highlighting the extraordinary nature of this rainfall.”
He said there has been a significant increase in motor insurance claims of up to 70 per cent compared to previous peaks.
“Within one day, we received more than 25 claims mainly from shops and restaurants which would be approximately Dh2 million to Dh3 million. Customers are reaching out to us, seeking assistance, especially with roadside assistance and car towing as they navigate the aftermath of the rains,” he said.
He added that the majority of the claims are related to motor vehicles that become stuck on flooded roads.
“Additionally, we are seeing a notable increase in property-related claims. A significant number of individuals are grappling with water leakage issues in their homes, resulting in damages that require immediate attention,” he said.
Mohammed Ali Londe, a vice-president and senior analyst at Moody’s Ratings, said the widespread flooding will give rise to significant insurance claims arising from property, motor, and business interruption policies.
“Local insurers tend to be heavy users of reinsurance, which will help moderate their losses in this instance but contribute to pressure for higher reinsurance prices at upcoming renewals,” he said.
Londe added that intense market share competition and soft prices have exerted pressure on the profitability of UAE insurers in recent years. “Although profitability has been improving slowly, we anticipate that these floods will reintroduce stress on earnings, especially for small and medium-sized insurers who have struggled to generate underwriting profits,” he added.
