UAE motorists report rising vehicle insurance renewal premiums despite no claims
Experts say risk-based pricing is driving higher renewal costs for some older and luxury vehicles despite strong competition in the insurance market.
Dubai: Motorists have reported higher insurance renewal premiums, particularly for older vehicles and certain luxury and high-performance models, despite not filing claims during their policy periods.
Customers said they were surprised by increases in renewal costs compared to last year, noting that the hikes were more noticeable for ageing vehicles and luxury cars that require expensive spare parts and repairs at authorised dealerships.
However, insurance experts said the UAE motor insurance market is increasingly relying on risk-based pricing rather than applying across-the-board increases, with competition among insurers helping to maintain overall price stability.
Risk-based pricing
Insurance expert Bassam Jalamiran said the UAE vehicle insurance market is becoming more dependent on pricing policies based on the risk profile of each customer.
“This trend reflects the development of underwriting tools and the use of data to determine prices more accurately,” he said.
Jalamiran added that he does not see evidence of a general increase in motor insurance prices during the first half of 2026, noting that competition among insurers remains strong and has helped keep premiums largely stable.
He explained that limited increases have occurred in specific segments where claims rates or reinsurance costs have risen.
Regulatory oversight
Jalamiran noted that the UAE insurance sector is one of the most regulated markets in the region.
He said the Central Bank requires insurance companies to conduct periodic pricing reviews through independent actuaries, who prepare technical reports to ensure pricing is based on sound actuarial principles and supports the financial sustainability of insurers.
He added that the implementation of the IFRS 17 accounting standard has strengthened pricing discipline by requiring insurers to assess the adequacy of pricing from the outset of underwriting.
According to Jalamiran, competition in the sector now depends increasingly on underwriting quality, risk management and portfolio profitability rather than aggressive price-cutting.
Relative stability
Insurance expert Montaser Khasawneh said motor insurance premiums remained relatively stable during the first half of 2026.
“Some vehicle categories witnessed pricing adjustments, but these were not general increases and were linked to risk levels, claims history, vehicle type and the underwriting policies of individual companies,” he said.
Khasawneh added that competition among insurers continues to keep premiums within reasonable ranges, with increases or reductions determined by risk assessments.
He noted that insurers continue to operate within the regulatory framework set by the Central Bank of the UAE, including minimum and maximum pricing limits.
Insurance price ranges
The pricing framework for compulsory motor insurance has remained unchanged over the past year and during the first half of 2026.
Premiums for private four-cylinder saloon cars range from Dh750 to Dh1,300, while pricing increases according to vehicle category and engine capacity, reaching up to Dh2,100 for some categories.
Although the regulatory limits have not changed, policyholders have experienced varying premium adjustments depending on factors such as accident history, driver age, vehicle type, repair costs and spare-parts prices.
Market growth
According to data from the Central Bank of the UAE, the country's insurance sector continued to expand during the first quarter of 2026.
Total written premiums rose 15.1% year-on-year to reach Dh27.5 billion.
Property and liability insurance premiums, which include motor insurance, reached approximately Dh10 billion, representing an annual increase of 11.1%.
Meanwhile, total claims paid by insurance companies increased 14.5% to Dh12.6 billion during the same period.