Insights from markets indicate that the car insurance industry is poised for growth, especially in light of the digital disruption that has started to unfold.
In 2015, a total of 1.7 million comprehensive motor insurance policies were issued in the UAE and this figure has grown by 12.3 per cent year-on-year. The number of Third Party (TPL) policies stood at 1.3 million, growing at 7.4 per cent year-on-year during the same period.
Nearly 300,000 used vehicles are imported to UAE every year from the US, Japan and Germany among others. But 90 per cent of those non-GCC spec cars rejected by insurance companies for comprehensive coverage, a new study has found.
The results in the survey carried out by classifieds portal dubizzle and financial comparison website Souqalmal.com also highlighted that insurance premiums can vary for the same car make and model based on many factors including; depreciation of the vehicle, vehicle specifications (GCC vs. non-GCC), the age of the driver and the number of driving years.
An in-depth analysis of the car insurance policies that have been purchased through Souqalmal.com between May 2016 and March 2017 indicates that the average premium per policy was around AED3,000 for comprehensive coverage.
The most popular features among UAE consumers when purchasing car insurance were agency repair and personal accident cover for drivers and passengers.
Looking at the number of insured vehicles, Japanese cars ranked first; as for year of manufacture, more than 50 per cent of the cars insured on the site were less than three years old. Based on the same period, the most insured cars in 2016 in the UAE were the following: Nissan Altima, Honda Accord, Honda Civic, Nissan Tiida, Mitsubishi Pajero and Toyota Corolla.
The value of the cars is not what owners think it is; for example, a Nissan Altima 2010 is valued at an average of AED25,460 in the used car market, while the insurance companies value it for an average of AED18,989.
However, a Nissan Altima 2016, valued at an average of AED51,572, is valued by the insurance companies at an average of AED88,650. Noting also that the age of the car is considered as a key factor: the premium for a comprehensive coverage of a Mercedes Benz S Class 2010 ranges between AED2,675 to AED3,450, while it ranges between AED10,447 to AED12,812 for a 2016 year of make.
Source: Press Release