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UAE Car Insurance Market Overview

Market Size in 2024:USD 3.65 Million

Market Size in 2033:USD 15.28 Million

Market Growth Rate 2025-2033:15.39%

"UAE Car Insurance Market: Industry Trends, Share, Size, Growth, Opportunity and Forecast 2025-2033", The UAE car insurance market reached USD 3.65 Million in 2024. The market is projected to reach USD 15.28 Million by 2033, exhibiting a growth rate (CAGR) of 15.39% during 2025-2033.

How AI is Reshaping the Future of UAE Car Insurance Market

• Revolutionizing Claims Processing: Insurers like Tokio Marine UAE have implemented AI-based document processing that tripled daily claims capacity, with some companies reducing processing times by 90%, enabling settlements in days rather than weeks.
• Enabling Usage-Based Insurance Models: With telematics powered by AI analysis, 27% of UAE motorists would switch insurers for discounts greater than 15%, transforming the traditional flat-rate pricing approach into behavior-based premiums.
• Fighting Fraud with Machine Learning: AI systems cross-reference thousands of data points to detect suspicious claims, analyzing inconsistencies between GPS data and damage reports, reducing false claims significantly across the industry.
• Powering Digital-First Customer Experience: Platforms like Shory and PolicyBazaar leverage AI-driven chatbots providing 24/7 support, with online sales jumping from less than 1% five years ago to 5-7% of the motor insurance market currently.
• Optimizing Premium Calculations: Real-time telematics data from accelerometers, GPS, and gyro sensors enable insurers to calculate personalized premiums based on driving patterns like night-time kilometers and urban rush-hour ratios.

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UAE Car Insurance Market Trends & Drivers:

The UAE's mandatory car insurance regulations are the bedrock of market expansion. Third-party liability insurance is legally required for all vehicles, with minimum coverage limits set at AED 2 million for property damage and AED 5 million for personal injury. Driving without insurance carries fines of AED 500 plus 4 black points, with vehicles impounded for 7-15 days. The UAE Insurance Authority's Circular No. 06/2025 explicitly permits usage-based insurance products, while mandatory flood coverage came into effect in July 2025. These regulatory frameworks, combined with approximately 200,000 new vehicle sales annually, create a robust foundation for insurance growth as every new car purchase automatically triggers an insurance requirement.

Telematics and usage-based insurance are transforming how UAE drivers pay for coverage. With 5G Phase-2 completion by Etisalat and Du enabling real-time data transmission, insurers can now track driving behavior through accelerometer spikes revealing harsh braking, GPS logging average speed, and camera snapshots flagging mobile phone use. Companies like Beema Insurance launched "Beema SmartDriver" in January 2022, offering cashback based on driving behavior. PwC Middle East research shows this technology appeals to cost-conscious drivers, especially safe operators who can save substantially through personalized premiums. The UAE Insurance Authority's regulatory green light has accelerated adoption, with more than 30% of fintech startups in the MENA region operating from the UAE, creating an ecosystem ripe for telematics integration.

Electric vehicle adoption is creating specialized insurance opportunities in the UAE, where 24,000 EV and hybrid units were sold in 2024. However, EV insurance presents unique challenges—comprehensive policies average AED 4,992 annually compared to AED 2,895 for traditional vehicles, representing premiums 20-35% higher. This premium gap stems from batteries and motors accounting for 40% of vehicle value, with replacement costs ranging from AED 60,000 to AED 80,000. Abu Dhabi National Insurance Company launched tailored EV packages in October 2024 addressing battery degradation and charging station incidents. Despite higher upfront costs, the Central Bank of UAE encourages discounts up to 25% for qualifying vehicles, with some insurers reporting flat or slightly lower rates in 2025 for claim-free EV owners as the market matures and repair infrastructure improves.

UAE Car Insurance Industry Segmentation:

The report has segmented the market into the following categories:

Coverage Insights:

• Third-Party Liability Coverage
• Collision/Comprehensive/Other Optional Coverage

Application Insights:

• Personal Vehicles
• Commercial Vehicles

Distribution Channel Insights:

• Direct Sales
• Individual Agents
• Brokers
• Banks
• Online
• Others

Regional Insights:

• Dubai
• Abu Dhabi
• Sharjah
• Others

Competitive Landscape:

The competitive landscape of the industry has also been examined along with the profiles of the key players.

Recent News and Developments in UAE Car Insurance Market

• January 2025: Sukoon Insurance launched a new comprehensive motor insurance policy with additional coverage options and enhanced customer protection features, expanding its reach across all emirates including operations in Oman and Qatar.
• January 2025: Motor insurance premiums in UAE increased by 15-20% for renewal policies compared to the previous year, driven by cautious pricing strategies following high claims from April 2024 flooding events.
• February 2025: The Insurance Brokers' Regulation 2024 took effect on 15 February 2025, requiring claim payments to be made directly from insurers to policyholders and prohibiting brokers from collecting premiums without specific authorization.

Note: If you require specific details, data, or insights that are not currently included in the scope of this report, we are happy to accommodate your request. As part of our customization service, we will gather and provide the additional information you need, tailored to your specific requirements. Please let us know your exact needs, and we will ensure the report is updated accordingly to meet your expectations.

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