The UAE’s insurance sector has made significant progress in processing claims from the devastating rains that hit the region on April 16, 2024, marking the heaviest rainfall in 75 years.
Within three months, the majority of claims were evaluated and successfully paid out, according to Toshita Chauhan, the business head at Policybazaar.ae.
However, some claims were declined due to fraudulent activities, with individuals attempting to exploit the situation.
Despite this, the overwhelming majority of genuine claims were honored, providing much-needed relief to those affected by the unprecedented weather event.
In a recent interview with Khaleej Times, Chauhan noted that the overall ecosystem responded effectively to the crisis, with both insurance companies and customers displaying patience during the recovery process.
“The worst is over,” she said, adding that the impact of the rains is now being felt in the form of rising premiums, as insurance companies adjust to the increased risk associated with the event.
While customers who did not file any claims may see little change in their premiums, those who have had claims processed will likely face higher renewal premiums to account for the increased risk.
The catastrophic rains, which caused massive damage to properties and vehicles in Dubai, Sharjah, and other northern emirates, resulted in an estimated loss of up to $2.5 billion (Dh9.175 billion), according to global ratings agency S&P.
This figure includes the devastating rainfall in April and other weather-related damages throughout the year. The financial burden was significant, with the UAE ranking among the top four countries globally for the costliest insurance events of 2024.
According to Aon, a global professional services firm, flooding was the primary cause of loss in Europe, the Middle East, and Africa (EMEA) regions, with the UAE included in a list of countries that experienced some of the highest insurance claims.
“Flooding was the dominant peril in EMEA, responsible for more than $35 billion in losses, driven by events in Spain, Central Europe, Germany, the UAE, and elsewhere,” Aon noted in its Climate and Catastrophe Insight report.
As the insurance sector grapples with the aftermath of the rains, there has been a notable surge in inquiries related to health insurance.
Policybazaar.ae reported a 75% increase in inquiries for health insurance, attributed to the rollout of mandatory health insurance in the northern emirates starting January 1, 2025.
Chauhan explained that the rise in interest is linked to changes in regulations and new pricing for health insurance policies in Dubai.
“Customer behavior changes whenever there is a deadline or fine associated with anything, and the UAE manages this operationally very well. It gives you ample time and a date when rules will come into effect,” she said.
In response to the growing demand for health insurance, Policybazaar launched PB Advantage, a program designed to simplify and enhance the health insurance experience in the UAE.
The program offers customers 30-minute claims assistance from a dedicated insurer-claims desk and automatically restores the sum insured after the first claim. F
or example, if an initial coverage of Dh1 million is used for surgery, the Auto Recharge feature will add another Dh1 million for any future claims related to different illnesses or conditions.
Additionally, the program offers a no-claim bonus, adding a 10% sum assured each year for every claim-free year, up to a maximum of five years.
Chauhan highlighted that PB Advantage was developed in response to customer feedback, addressing common pain points such as delays in premium rate turnarounds for those with pre-existing conditions.
The program promises to provide accurate quotes within 60 minutes of a query being raised, offering reassurance to customers with ongoing health concerns.
“We wanted to address these pain points head-on with a program that simplifies and enhances the health insurance journey,” Chauhan said.
As the insurance industry continues to recover from the financial impact of the record rains and adjusts to the rising costs associated with the events of 2024, the sector remains focused on enhancing customer experience and offering more accessible and efficient coverage options.
With the impending changes to health insurance regulations, the demand for insurance products is expected to continue rising in the coming months, with many customers seeking coverage that balances affordability with comprehensive protection.
The UAE’s insurance market is navigating a period of transformation, marked by both challenges and opportunities.
While the increased risk from climate-related events like the April rains may lead to higher premiums, the sector’s innovative response, including initiatives like PB Advantage, aims to ensure that customers are supported with faster claims processing and more flexible coverage options.
As the new year progresses, insurers will continue to adapt to a rapidly changing landscape, offering more tailored products to meet the evolving needs of consumers.