Report Overview

Growing consumer adoption of motor insurance, a rise in the number of road accidents and vehicle damage, and increased use of commercial vehicles could boost the growth of UAE Motor Insurance Market during the forecast period between 2023 and 2029.

UAE Motor Insurance Market – Industry Trends & Forecast Report, 2029

The UAE motor insurance market size was estimated at USD 1,499.98 million in 2022. During the forecast period between 2023 and 2029, the UAE motor insurance market size is expected to grow at a CAGR of 1.93% reaching a value of USD 1,707.65 million by 2029. The number of crashes, traffic collisions, and accidents is increasing. All of these factors are important in determining auto insurance rates. People in large metropolitan areas, for example, are willing to pay a high premium due to their high disposable income. Bad driving is a problem in every city because people are texting, talking, or doing other things while driving, which could be a major cause of accidents. Auto insurance pays for the costs of an injured person's medical care, lost wages, vehicle repair, and any property damaged in an accident. Therefore, to avoid financial losses, people are purchasing auto insurance, which is increasing its demand during the forecast period.

UAE Motor Insurance Market - Overview

Motor insurance covers cars, trucks, automobiles, motorcycles, and other vehicles. Motor insurance is in high demand and is becoming more popular among consumers because it provides financial protection in the event of vehicle damage as well as injuries to other drivers, passengers, or pedestrians (i.e., third-party cover). Therefore, having adequate car insurance is both a legal requirement and a necessity.

Growth Drivers

Emergence of Third-Party Liability Insurance

People's ignorance caused collisions, accidents, and other threats or harm to third parties. The fundamental insurance policy has nothing to do with car damage, but third-party liability insurance pays for any property damage the owner of the car causes to third parties who are not protected by the policy. This coverage offers protection from monetary loss if third parties, including walkers, drivers, and passengers of other vehicles, suffer property damage, disability, injuries, or death. Nonetheless, this kind of planning aids in safeguarding third parties' interests. In the upcoming years, the motor insurance market is expected to benefit greatly from all of these aspects.

Restraints

Lack of Awareness about Benefits of Various Schemes of Motor Insurance

Because of people's ignorance, collisions, accidents, and other threats or harm to third parties occurred. The basic insurance policy has nothing to do with car damage, but third-party liability insurance compensates the owner of the car for any property damage caused to third parties who are not covered by the policy. This coverage protects from monetary loss if third parties, such as walkers, drivers, and passengers in other vehicles, sustain property damage, disability, injuries, or death. Nonetheless, this type of planning helps to protect the interests of third parties. All of these factors are expected to benefit the auto insurance market significantly in the coming years.

Impact of COVID-19 on the UAE Motor Insurance Market

The COVID-19 pandemic severely influenced the UAE motor insurance market due to the lengthy nationwide lockdown that caused businesses to cease. A significant amount of premiums goes toward the purchase of new cars, thus the shutdown and resulting near halt to activity could make things worse. One of the most significant issues facing the business is the lack of new car purchases. Typically, to make up for that, the coverage net of existing vehicles would be increased, as the vast majority of them are no longer covered by insurance by the third and fourth years.

UAE Motor Insurance Market

Segmental Coverage

UAE Motor Insurance Market - By Coverage

On the basis of coverage, UAE motor insurance market is divided into Liability Coverage, Collision Coverage, and Comprehensive Insurance segments. The liability coverage segment dominates the UAE motor insurance market. The main advantages of this coverage type are that it compensates for any damage caused to a third party, such as disability, death, or loss of property. Third-party liability coverage provides legal and financial protection. The possibility of vehicle accidents and third-party damage is a major reason for the increased preference for third-party liability coverage insurance.

UAE Motor Insurance Market - By Distribution Channel

On the basis of distribution channel, the UAE motor insurance market is divided into Insurance Agents/ Brokers, Direct Response, and Banks segments. During the forecast period, the insurance agents/brokers segment is expected to record the fastest growth in the UAE motor insurance market. This is due to the ease of purchasing insurance policies, insurance agents guide discounts, offers, and plans, bolstering consumer confidence in purchasing motor insurance.

UAE Motor Insurance Market - By Vehicle Age

On the basis of vehicle age, UAE motor insurance market is divided into New Vehicles and Old Vehicles.

UAE Motor Insurance Market - By Application

By application, UAE motor insurance market is divided into Commercial Vehicle and Personal Vehicle segments. The personal vehicles segment is a larger contributor to the UAE motor insurance market. The substantial number of personal vehicles on the road across UAE has increased the demand for vehicle insurance. The rising affordability of personal vehicles due to easy financing and EMI options are fueling demand for vehicle insurance, which is also increasing. The rapidly increasing popularity of electric vehicles is expected to have a significant impact on the UAE motor insurance market's growth during the forecast period.

Competitive Landscape

Major players in the UAE motor insurance market include Bajaj Allianz, Allstate Insurance Company, Admiral, Berkshire Hathaway, Inc, CHINA PACIFIC INSURANCE CO., and GEICO. The key strategies used by these market leaders include new product launches, mergers & acquisitions, and alliances. To grow their market share, these companies are also focusing on investing in innovations, collaborations, and expansions.

Recent Developments

• In 2021 - The UAE Insurance Authority imposed new regulations for motor insurance pricing to promote competition and transparency in the market. Under these regulations, insurers are required to offer more affordable and flexible motor insurance policies to customers and are subject to penalties if they fail to comply.

Scope of the Report

By Coverage

• Liability Coverage

• Collision Coverage

• Comprehensive Insurance

• Others

By Distribution Channel

• Insurance Agents/ Brokers

• Direct Response

• Banks

• Others

By Vehicle Age

• New Vehicles

• Old Vehicles

By Application

• Commercial Vehicle

• Personal Vehicle