UAE car insurance prices have peaked, industry executives say
UAE insurers expect car insurance prices to level off after two years of increases, executives said at the 21st Annual Gulf Insurance Forum in Dubai. Some drivers with accident-free records are already receiving lower quotes, though limited price increases may continue.
Layla Haddad
Smaller increases expected
Adal Sarour, CEO of Liva Insurance's UAE and Bahrain office, said annual price increases of 10% to 15% over the past two years had brought the market to a peak. He expects further increases to be limited rather than a repeat of those earlier jumps.
Anas Mustarihi, founder of the eSanad insurance platform, described a shift toward stable and somewhat lower prices in 2025 and 2026 following the sharp increases of 2024. Some insurers, he said, have reduced premiums for selected groups of drivers with accident-free records.
Jihad Fitrouni, CEO of insurance risk management company UIS Management, also forecast stable policy prices in the coming period.
Separately, Atlas Magazine's UAE market data, published October 16, 2026, put motor insurance turnover at AED 10.08 billion, or about USD 2.74 billion, in 2025. That represented a 25.1% increase from AED 8.05 billion in 2024. Motor insurance accounted for 13.5% of total UAE insurance premiums.
Vehicle type and repair costs shape premiums
Mustarihi put premiums for conventional cars at 2.5% to 3% of vehicle value, compared with 3.5% to 3.75% for Chinese and electric cars. He said Chinese and electric vehicles represented about 40% of new car sales in 2024.
Sarour attributed part of the increase in average prices to the arrival of vehicle models for which insurers lack performance records. These newer entrants have grown from about 2% of the market five years ago to about 20% now, he said, and he expects their share to reach about 50% within three to four years.
Repair expenses also influence pricing. Sarour said disruptions associated with the COVID-19 pandemic and geopolitical tensions had made suitable-quality spare parts harder to obtain and increased maintenance costs.
Farid Lutfi, secretary general of the Gulf Insurance Federation and the Emirates Insurance Federation, identified parts availability, repair costs and workshop quality as key influences on insurance costs. Some Chinese models occasionally face shortages of spare parts, he said.
An Axxion Claims Settlement Services report published in May 2026 illustrates differences in claims costs. It puts average at-fault claims for Tesla vehicles in the UAE at approximately three times those for equivalent German marques: about AED 14,200 for Tesla, compared with AED 4,800 for Mercedes-Benz combustion-engine vehicles. Those figures exclude advanced driver-assistance system recalibration costs.
Driving records and policy discounts
Lutfi said insurers should consider both the driver and the vehicle when setting a premium. A clean traffic record can qualify a driver for a lower price.
According to Axxion's summary of the UAE Unified Motor Insurance Policy, the maximum premium for comprehensive coverage on saloon cars is capped at up to 5% of vehicle value. The no-claim discount schedule provides 10% after one year, 15% after two years and 20% after three or more years.
Fleet discounts can reach 30%, while gas or electric vehicles can receive a discount of up to 25% at renewal. The standard policy term is 13 months: 12 months plus a one-month grace period.
The claims burden from the 2024 floods
Sarour described the exceptional weather in 2024 as a major event for insurers, particularly motor insurers, which bore a large share of claims. Fitrouni said the weather also changed the vehicle insurance and accident management market.
Axxion, citing Guy Carpenter's August 2024 revision, reported total insured losses across the industry of AED 10.6 billion to AED 12.5 billion from the April 2024 UAE floods. Guy Carpenter's early motor-only estimate was AED 550 million to AED 920 million as a first-loss figure, with between 30,000 and more than 100,000 vehicles affected.
Axxion's May 2026 report said property and motor insurance rates increased by an average of approximately 30% across the UAE market in response to the floods. Insurers also increased deductibles on subsequent renewals.
Dubai forum examines insurance risks
The 21st Annual Gulf Insurance Forum opened in Dubai on October 26, bringing together 200 CEOs and insurance and reinsurance experts from 25 countries.
The two-day agenda covers how artificial intelligence could change insurance, along with cyber risks and risks associated with AI. Participants will also examine alternative capital, catastrophe bonds, insurance-linked securities and the role of actuarial departments, with the aim of developing a strategic agenda for insurance leaders.
