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FINANCIAL NEWS
UAE’s car insurance rates likely to drop under 3%
02 Jan 2012
(MENAFN) UAE’s Gargash Insurance Services’ managing director, Mustafa Vazayil, said that auto insurance rates could dip below 3 percent, reported Gulf News.
Vazayil added that the decline would result from over-supply in the auto insurance market, adding that if the decrease in rates would occur, it would lead to a catastrophic situation in the short and the medium term.
He also said that the motor division accounted for over 50 percent of UAE’s insurance firms’ gross premium income, as other segments including construction and property didn’t generate enough opportunities as the motor segment.
It is worth noting that in 2011, fewer accidents were recorded in the UAE, resulting in lower insurance payouts, however, insurance firms failed to benefit effectively, since these risks were written on low premiums.
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