Mordor Intelligence, a market research specialist, announced that the automotive insurance market in the United Arab Emirates is expected to grow from AED 6.54 billion in 2025 to AED 7.09 billion in 2026, reaching AED 10.51 billion by 2031, with a compound annual growth rate (CAGR) of 8.25% from 2026 to 2031. The growth trajectory is based on the continued enforcement of third-party liability insurance upon registration and renewal, climate-related repricing, and the digital transformation that has reduced quotation time to under a minute on electronic platforms. Increased risk awareness following the April 2024 floods has accelerated the shift from third-party to comprehensive insurance, which covers natural disasters. Insurance companies have introduced parametric incentives to speed up claim settlements during heavy rainfall waves, enabling instant compensation payouts without waiting for loss assessments. The use of AI for claim sorting, digital identity for instant document issuance, and product innovations like parametric insurance are improving the customer experience. Insurance companies are recording record profits driven by faster settlements and stricter underwriting, confirming the market's transition from premium growth to disciplined profitability. In a coverage analysis, Mordor Intelligence reported that comprehensive insurance held 60.84% of the market in 2025, with projected growth of 8.78% until 2031, driven by increased risk awareness after the 2024 floods. In distribution channels, brokers accounted for 60.46% of the market in 2025, while comparison platforms showed the fastest growth at 11.62%, supported by digital integration and reducing document issuance time to under a minute. In vehicle classification, passenger cars constituted 81.27% of the market in 2025, while commercial vehicles are expected to grow at a 9.14% CAGR until 2031, driven by ride-hailing and logistics platforms. Mordor Intelligence also noted that used cars held 63.58% of the market in 2025, with a projected growth rate of 9.74%, driven by cost factors and increased demand for comprehensive coverage following the floods. Major online platforms have registered millions of users and user databases, reflecting the role of price transparency and service speed in market expansion, while insurance companies focus on AI-driven claims and post-issuance services to maintain margins. Regarding auto financing, the company stated that bank and agent financing for new purchases requires comprehensive insurance with the lender listed as a loss payee, ensuring stable demand for insurance. This linkage is reflected in pricing data, where insurance and financial services pricing remained stable in 2025, while the proliferation of electric vehicles supports continued comprehensive coverage to protect higher values and battery components. Insurance companies are developing specialized EV packages in collaboration with manufacturers and dealers, focusing on roadside assistance and data-driven risk assessment, which enhances premium quality and sustainability. On the technology front, Mordor Intelligence noted that connected vehicles and advanced driver-assistance systems (ADAS) enable improved risk assessment.
