The insurance landscape in Dubai is set to undergo significant changes starting January 1, 2025. Health and motor insurance premiums are expected to increase as insurers respond to evolving cost structures. Alongside these adjustments, policyholders can look forward to enhanced benefits, making this an opportune moment to rethink insurance strategies and priorities.
Key drivers of the premium increases
The upward revision in premiums stems from several interrelated factors:
Rising costs in healthcare and vehicle repairs
Over the past year, healthcare and vehicle repair expenses have increased significantly. These growing costs have directly impacted claims, making it necessary for insurers to adjust premiums to maintain adequate coverage and benefits for policyholders.
Pandemic-era discount withdrawal
During the pandemic, discounts were introduced as a temporary measure to ease financial pressures on customers. With these measures now withdrawn, the return to standard pricing is reflected in the upward trend in premiums.
Claim patterns and cost structures
Evolving claim patterns, driven by broader economic factors and market dynamics, have further contributed to this shift. Insurers are responding to these trends with revisions that aim to balance affordability for customers with the financial sustainability required to meet these increasing demands.
Sector insights: Health vs. motor insurance
The adjustments differ across sectors, reflecting unique cost pressures and market conditions:
- Health insurance: Health insurance premiums are expected to see a more pronounced increase, estimated between 10–15%. Factors driving this rise include the increasing costs of medical services, healthcare inflation, and higher claims.
- Motor insurance: Premium increases in motor insurance are anticipated to be more modest compared to the health sector. In 2024, motor insurance rates surged due to higher claims from natural events like floods and the withdrawal of discounts. The upcoming adjustments for 2025 will likely reflect more stable trends.
Strategic advice for policyholders
For policyholders, this transition presents a moment to act thoughtfully. Here are some practical recommendations:
- Plan ahead: Renew or purchase your insurance well in advance to ensure adequate coverage and avoid penalties for delays.
- Focus on value: Choose a policy that aligns with your personal needs and offers the best value rather than focusing solely on timing.
- Lock in current rates: Renewing policies before expiration can help secure current rates and protect against premium increases.
- Avoid gaps: Early renewal ensures you maintain continuous coverage and avoid any fines or disruptions.
A holistic approach to industry evolution
These changes signal more than just an adjustment in pricing—they reflect the broader evolution of Dubai’s insurance industry. By addressing rising costs and ensuring policyholders continue to receive adequate benefits, these revisions contribute to a more sustainable and resilient insurance ecosystem.
For insurers, this moment is an opportunity to innovate and deliver greater value through enhanced customer experiences and tailored solutions. For policyholders, it’s a chance to reassess coverage needs and embrace new opportunities for protection and security.
A positive path forward
I believe these changes are an important step in aligning our industry with the evolving needs of residents in Dubai. While premium increases are a necessary adjustment to meet rising costs, they also underline the importance of providing robust, comprehensive coverage that ensures peace of mind for policyholders.
At InsuranceMarket.ae, we remain committed to guiding our clients through this transition. With our dedicated insurance advisors and claims managers, we’re here to provide personalised advice and seamless support, helping you navigate these changes with confidence.
Together, let’s embrace this evolution and build a stronger, more customer-focused insurance industry for the future.
