NEED INSURANCE? DON’T COUNT ON IT BEING CHEAP

If you’ve recently renewed your car or health insurance and felt a sharp sting in your wallet, you’re not alone and it’s not just a UAE problem. From Dubai to London to Los Angeles, insurance premiums have surged. But why?

- BY JUSTIN GEORGE VARGHESE

Insurance is a global industry, and many of the forces driving up premiums are interconnected across borders. Whether it’s your motor policy, health coverage, or home insurance, understanding what's behind these increases can help you better navigate future choices and maybe even reduce your costs.

So, what’s going on?

Insurance is, at its core, a business of predicting risk. Insurers collect premiums today to cover claims tomorrow. When the cost of those claims or the likelihood of them happening increases, premiums go up to balance the books. And in recent years, those costs have been rising fast.

Let’s break down the main culprits driving premium hikes globally and how they relate to what we're seeing in the UAE.

MORE EXPENSIVE CLAIMS

Across the world, insurance claims have become more frequent, and more costly.

■ Vehicle repair costs are soaring. Newer cars - including electric and luxury vehicles have more complex tech like sensors and cameras, making even minor repairs costly.

■ Health care inflation means it’s more expensive to treat patients, especially as hospitals upgrade technology and deal with global supply chain issues.

■ Litigation costs are rising, especially in places where legal settlements have grown larger. More claims mean higher pay-outs.