UAE insurers experience surge in fire insurance
Wednesday, 05 16 2018, Category: Insurance and Reinsurance, Country: U.A.E
UAE insurers have registered a rise in applications for home and contents insurance following the Zen Tower fire in Dubai Marina - however the surge is expected to be short-lived.
John Waldron, head of private clients at Nexus Insurance Brokers said the company was “busier than usual” with home insurance enquiries since the fire broke out on Sunday morning.
“This is a pattern we have observed after similar incidents in the past,” said Mr Waldron. “When a fire happens, you do see that immediate response, and there is a brief surge in new business enquiries. After the fire in the Torch Tower last year, we saw a massive spike in enquiries coming into the market for maybe a three- to four-week period, but then the interest essentially reverts to typical volumes.”
Penetration rates of home insurance in the UAE are low by international standards, hovering around the 10 per cent mark for several years despite a spate of high-profile fires in Dubai that have seen some residents lose the entire contents of their homes. According to a study published last month by the price comparison website, yallacompare.com, only 11 per cent of UAE consumers are subscribed to a policy. This is far lower than developed markets, such as the UK, which global insurer Zurich says has a penetration rate of 75 per cent.
A 2016 study carried out by yallacompare found it would cost at least Dh28,000 to refurnish an average one-bedroom apartment in the UAE – a predicament some residents of the Zen tower fire may be facing.
“A simple contents policy with some cover for your personal effects can cost as little as Dh250 annually,” said Mr Waldron. “At a cost of less than a dirham a day for cover, it represents terrific value for peace of mind in the possibility of the worst-case scenario arising.”
Source: The National – UAE