Car insurance claims on the rise, drivers should be more diligent on the road and when choosing insurance

• During COVID19, car insurance claims declined to about 60% level
• Insurance companies lowered premiums during COVID
• In 2021, trend reversal and +45% claims
• Main causes of accidents and claims are preventable
• Further trend acceleration expected due to non-travel / less travel of residents
• Increasing insurance premiums likely
• Dangerous trend to 3^rd party only cover

COVID-19 and its subsequent implications had led to less people and drivers on the road. As such, it’s been observed that during the pandemic, insurance claims have reduced significantly. With this, insurance companies have also adjusted prices accordingly to reflect lower accidents and repair claims.

However, with UAE’s strong vaccination drive, the country is opening up to tourism and citizens are starting to return to the office. Hence, this trend of reduced accidents and insurance claims is now on a reverse. RSA Insurance shares with RoadSafetyUAE that claims rates are on the rise, and has increased close to 45% in the recent months, compared to during the months of COVID-19. This is now at similar levels as 2019, before the COVID-19 pandemic. RSA observes this alarming result, especially given that some COVID-19 restrictions are still in place, domestic activity has not resumed to 2019 levels, but claims rates have already. The key causes of these claims are preventable. Claims due to wrong action of the driver made up a large portion of the claims (about 40%) in recent months. This includes accidents caused by speeding and not keeping sufficient distance between cars.

Sunita Pais, Head of Claims, RSA UAE states: “As of today, many countries are still implementing restrictions in attempt to control and curb the spread of COVID-19 and its variant strains. UAE is considered, on a global scale, to be one of the first few countries to have resumed similar levels of economic activity, hence this trend of increased car insurance claims is likely to be a reference for other markets. Furthermore, with many countries still imposing strict restrictions on travel, it is likely that this year, many UAE residents will remain in the country, which may amplify the accident rates on the road. RSA also warns that as we approach the peak summer months, where car tire failures are more likely, in combination with more residents staying in the country this summer, drivers should be more alert when driving.”

RSA continues to share with RoadSafetyUAE that with the increase of claims, it is likely that motor insurance prices will begin to readjust itself and increase over the next few months.

Ms. Pais continues: “RSA also urges customers to be cautious when purchasing insurance as intensive competition amongst insurers may mean some products don’t offer sufficient coverage. RSA has observed that since the pandemic started, many customers have switched to Third Party insurance as it is more economical, however it only covers for damages caused by third parties. Importantly, this insurance product does not cover own damages. Hence, it is important to select insurance products from reputable brands, to understand what level of coverage is needed and to read policy wordings carefully before purchasing.”

Thomas Edelmann, Founder and Managing Director of RoadSafetyUAE adds: “Insurance companies are possessing large amounts of data which can play an important role in understanding accident patterns. We are grateful to RSA for sharing their data, as all involved stakeholders want to elevate the discussion from anecdotal evidence to fact-based evidence. It is needless to say that the correct insurance cover is a vital part of road safety and we appreciate the insights RSA shares with the broader public.”

About RSA Middle East B.S.C. (c)

RSA Middle East is a leading provider of property and casualty insurance in the Middle East. It offers solutions for both commercial and retail clients, across a range of product lines, including motor, property, medical, SME as well as tailored solutions for large corporates. It has operated in the region for 70 years, bringing best-in-class international solutions and expertise to the Middle East.

RSA Middle East is a joint venture formed by RSA Group, with majority shareholding, and regional shareholders in the Middle East. It has operations in Bahrain, UAE, Oman and the Kingdom of Saudi Arabia. It operates as local publicly listed companies in Oman, under Al Ahlia Insurance Company, and in Saudi Arabia, under Al Alamiya For Cooperative Insurance Company.

About RoadSafetyUAE:

RoadSafetyUAE’s vision is to contribute to reducing the number of road traffic fatalities, injuries and accidents in the UAE. RoadSafetyUAE’s mission is to raise the awareness for proper conduct on our roads, in an engaging manner and on a broadly communicated and permanent basis. RoadSafetyUAE’s award-winning platform engages with the stakeholders traffic participants, governmental entities, the media, and corporate social responsibility (CSR) minded partners. ‘Tips & Tricks’ are the content backbone, provided for more than 60 topics of road safety, all specifically relevant to the UAE. More information can be found on www.RoadSafetyUAE.com