UAE Car Insurance Market Growth: Trends, Opportunities & Forecast

According to IMARC Group's latest research publication, UAE car insurance market size was valued at USD 4.24 Million in 2025. The market is projected to reach USD 15.45 Million by 2034, exhibiting a growth rate of 15.46% during 2026-2034.

How AI is Reshaping the Future of UAE Car Insurance Market

• Automated Claims Processing: AI analyzes damage photos, verifies documentation, and processes claims automatically, with UAE insurers reporting up to 90% reduction in claims processing time, enabling settlements in days instead of weeks.
• Telematics-Based Personalized Pricing: Machine learning analyzes driving behavior, speed patterns, braking habits, and mileage in real-time, enabling insurers to offer fair, customized premiums that reward safe drivers with lower rates.
• Fraud Detection and Prevention: AI-powered image recognition verifies damage photos against accident locations, analyzing thousands of data points instantly to flag suspicious claims and reduce fraudulent activities significantly.
• 24/7 AI Chatbot Assistance: Intelligent chatbots provide instant policy information, quote comparisons, and customer service around the clock, enabling self-service portals that enhance satisfaction and reduce operational costs.
• Risk Assessment and Underwriting Automation: Advanced algorithms process vast datasets including driver history, vehicle specifications, and behavioral patterns to calculate accurate risk profiles and optimize premium structures efficiently.

Unlock the Latest 2026 Data, Insights & Outlook

How Vision 2031 is Revolutionizing UAE Car Insurance Industry

The UAE's "We the UAE 2031" vision is fundamentally transforming the insurance landscape through aggressive digital infrastructure investments and regulatory modernization. The nation aims to raise GDP from AED 1.49 trillion to AED 3 trillion, with insurance playing a critical role in protecting this economic expansion. With 99% internet penetration and digital-first government services, the UAE is building the world's most connected insurance ecosystem. The Central Bank's Federal Decree-Law No. 48 consolidates insurance regulations ensuring transparency and policyholder protection. The Insurance Brokers' Regulation effective from February requires direct insurer-to-policyholder payments and dedicated account systems, enhancing trust and operational efficiency. Government initiatives supporting electric vehicle adoption, autonomous vehicle testing, and smart city development are creating specialized insurance demands. These reforms position the UAE as a regional insurance innovation hub.

UAE Car Insurance Market Trends & Drivers:

Mandatory insurance regulations and strengthened compliance frameworks form the foundation of market growth. Every vehicle on UAE roads must carry at least third-party liability coverage, ensuring consistent customer acquisition and retention. The Central Bank's consolidated regulatory framework enhances transparency and policyholder protection, while broker regulations now require direct payments and dedicated account systems that minimize conflicts of interest. Recent reforms include flood coverage requirements in Northern Emirates and increased minimum liability limits. Vehicle registrations climbed to 4.56 million by mid-year, up from 4.17 million previously—adding approximately 390,000 vehicles that require mandatory insurance. Strict enforcement mechanisms automatically link policies to registrations, preventing coverage lapses and driving sustained market expansion across all emirates.

Digital transformation is revolutionizing how UAE consumers interact with motor insurance. InsurTech platforms like Shory, Policybazaar, and myAlfred enable policy purchases in under 90 seconds using just plate numbers, fundamentally changing customer expectations. Online insurance sales surged from under 1% five years ago to 5-7% currently, reflecting rapid digital adoption among tech-savvy consumers. Partnerships between insurers and financial institutions are expanding distribution channels—Shory's integration with Wio Bank allows users to purchase and finance coverage with flexible installments directly through banking apps. The unprecedented April rainfall event causing widespread vehicle damage prompted insurers to update pricing models and expand natural disaster coverage in comprehensive policies. Digital platforms now provide instant quotes, paperless processing, and seamless claims management through mobile applications, significantly improving customer experience.

Electric vehicle proliferation and specialized coverage development present substantial growth opportunities. Survey data covering over 12,000 respondents across 33 countries reveals 94% of UAE EV owners plan to purchase another electric vehicle—second only to China globally—reflecting strong commitment to sustainable mobility. EV insurance premiums average 20-35% higher than conventional vehicles due to battery components representing up to 40% of vehicle value and limited specialized repair infrastructure. Forward-thinking insurers are introducing coverage for battery degradation, charging station incidents, software malfunctions, and roadside charging assistance. The growing expatriate population, rising disposable incomes, and luxury vehicle ownership in Dubai and Abu Dhabi create demand for comprehensive protection plans. Government incentives supporting EV adoption and autonomous vehicle testing are driving insurers to develop innovative products addressing these emerging vehicle technologies and specialized risk profiles.

UAE Car Insurance Market 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 market research report has also provided a comprehensive analysis of the competitive landscape. Competitive analysis such as market structure, key player positioning, top winning strategies, competitive dashboard, and company evaluation quadrant has been covered in the report. Also, detailed profiles of all major companies have been provided.

Recent News and Developments in UAE Car Insurance Market

• December 2025: Dubai Police launched a new digital service enabling motorists to secure a 'To Whom It May Concern' certificate for vehicle damage resulting from weather-related incidents, without the need to visit a police station physically. This certificate is typically necessary when submitting insurance claims for damages caused by heavy rainfall, flooding, or other natural events, streamlining the claims process and improving convenience for vehicle owners.
• September 2025: Policybazaar for Business, the B2B division of Indian insurtech Policybazaar.com, expanded its reinsurance operations to the UAE, Qatar, Oman, and Sri Lanka. This initiative positions the company among the first India-based intermediaries to bring a technology-enabled reinsurance model to international markets, leveraging digital solutions to enhance efficiency and innovation across cross-border insurance services.
• August 2025: Shory partnered with Wio Bank to embed car insurance services directly into the Wio Personal app, enabling users to purchase and finance coverage with flexible installments. This collaboration represents a significant step in making insurance more accessible and convenient for UAE residents.
• May 2025: Policybazaar.ae broadened its PB Advantage initiative to include car insurance customers, transforming how UAE residents handle motor coverage and claims with complimentary car washes, fixed-rate savings on maintenance and repairs, and exclusive deals on the Registration Readiness Package.
• April 2025: Shory facilitated drivers to secure comprehensive vehicle insurance in under 90 seconds requiring only a plate number, addressing the region's growing demand for efficient and transparent insurance services.

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