Motor insurance prices expected to continue to fall in 1Q

NGI - Motor Insurance

Motor insurance premium rates are expected to fall further in the first quarter of this year, continuing a decline which started since the onset of the COVID-19 pandemic last year, according to Mr Frank Heimburger, chief personal lines officer at AXA Gulf.
In an interview with Emirates Today, he attributed the price decline in motor insurance rates last year, by as much as 25%, to the reduction in claims, which was in turn due to COVID-19 lockdown measures and the changes they caused in the frequency of driving.

“As for the future, we see the possibility of companies viewing working from home as a sustainable approach, which would lead to a decrease in the need for driving, and thus reduce accidents and claims,” he said.
He added, “If this becomes the case, the premium rate should reflect the new normal, which is still unknown at this stage.”
Increased competition
He said, “It is possible that we will see an additional decrease in car insurance premiums in 2021, as a result of increased competition in the market.” This could arise because insurance companies will seek to enhance their growth and increase their market share.
He added, “The competition is very fierce, especially in the luxury car sector, which makes rewarding good drivers more important.”