While preliminary estimated insured property losses arising from the floods in April in the UAE are likely to exceed US$650m, they could reach as high as $850m, with the most affected emirate being Dubai, says Guy Carpenter, a leading global risk and reinsurance specialist.
In its “CAT Resource Centre Post Event Report – Gulf Floods April 2024”, Guy Carpenter says that large policies affected would have several primary policy conditions, and losses to insurance companies can vary significantly.
The estimated number of motor vehicles affected by floods is between 30,000 and 50,000 in the UAE, mostly concentrated in Dubai. Only the vehicles with comprehensive policies will be covered by insurance companies (TPL policies typically do not cover Nat Cat perils). Accordingly, the estimated preliminary insured loss for motor is likely to exceed $150m but could reach as high as $250m for the UAE. Claims are still developing, and this estimated number is subject to further change.
To evaluate the exposure at risk, Guy Carpenter has provided a map for potential flood-affected areas across the region, which is integrated into GC AdvantagePoint®, Guy Carpenter’s market-leading proprietary tool.
Impact on the insurance industry
After such an event, Guy Carpenter says that one may see some impact on the original insurance policies and reinsurance arrangements to cater for such an event. Below are some considerations:
- Insurance awareness: Guy Carpenter expects this to increase among personal lines as well as the commercial and industrial sector.
- Insurance claims: Insurance companies may experience a surge in claims related to vehicle repairs, property damage, business interruption, liability and other types of coverage.
- Losses and financial impact: Depending on the size of loss, insurers may need to tap into their reserves or seek additional reinsurance support to manage the financial impact.
- Market dynamics: Insurers and reinsurers may review their risk appetite, revise their underwriting guidelines, and reassess their exposure and accumulation control, which in turn can impact pricing and competition.
Reference: https://www.meinsurancereview.com/News/View-NewsLetter-Article?id=88050&Type=MiddleEast
Last modified: May 3, 2024
