The United Arab Emirates’ insurance sector is poised for another year of robust expansion, with growth expected to reach up to 20% in 2025, following a 21% surge in insurance revenue in 2024. Industry leaders credit this momentum to digital innovation, strategic realignments, and a resilient response to last year’s record-breaking floods, a report from Khaleej Times highlighted.
Despite grappling with the heaviest rainfall in 75 years—causing insured losses estimated between US$2.9 billion and US$3.4 billion—UAE insurers ended 2024 on a strong financial footing. Premium increases in motor and property lines, alongside a series of mergers and acquisitions, bolstered the industry’s bottom line. More than half of listed insurers saw a 12% rise in post-tax profits, highlighting the sector’s agility and robust risk frameworks.
Emir Mujkic, director of Insurance Ratings at S&P Global Ratings, noted that insurers are investing heavily in automation and digital platforms. These technologies are expected to revolutionize customer engagement and claims processing, helping the sector maintain a competitive edge in a digitally driven economy.
The April floods exposed critical gaps in climate risk modelling, traditionally centered around seismic activity. Analysts from AM Best stressed the importance of refining weather-related exposure assessments amid shifting global climate patterns. Still, reinsurers absorbed most of the flood losses, easing pressure on local insurers and demonstrating the strength of the UAE’s reinsurance programs.
The floods also prompted industry-wide recalibration. Reinsurance renewal costs climbed, and insurers raised direct business rates, particularly after the removal of motor insurance discounts in mid-2023. Insurance service results rose 14% year-on-year, reflecting improved technical pricing and risk management practices.
While property and engineering lines remain heavily reinsured, insurers are exercising stricter underwriting in medical segments, where high utilization and competitive pricing continue to erode margins. Some firms have exited unprofitable corporate accounts to ensure long-term financial stability.
Looking ahead, the January 2025 rollout of mandatory medical insurance across the Northern Emirates is expected to spur further growth. AM Best forecasts a gradual increase in claims utilization, initially muted by low awareness of benefits. Additional growth may come from optional products launched under the Ministry of Human Resources and Emiratisation’s programs.
Across the Gulf, insurance markets are expected to grow by 5% to 15%, but the UAE stands out for turning adversity into advancement. The 2024 floods, though devastating, accelerated industry transformation and highlighted the resilience of the country’s insurance ecosystem.
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