Guy Carpenter has reported that insured losses from April flooding in the Middle East could reach $2.4 billion.
The reinsurance broker highlighted that insurance claims and loss information are still being compiled for damages in the United Arab Emirates, Bahrain, and Oman.
As per AM Best, Guy Carpenter indicated that its reevaluation of insured loss estimates, based on recent claims data and analysis of precipitation maps, suggests total insured losses in the UAE could exceed $1.6 billion and reach up to $2.4 billion. Motor losses account for about 10% of the total.
The company noted that the economic loss is likely to be much higher due to the relatively low insurance penetration rate in the UAE.
Given the increasing frequency and severity of floods in the region, Guy Carpenter announced that its peril and model advisory team is developing a proprietary flood model for the Middle East/North Africa region, which will be released soon.
Previously, Guy Carpenter estimated that flooding in the UAE, Bahrain, and Oman could generate insured losses of up to $850 million. Preliminary estimates suggested that insured property losses from the April 14-17 floods would likely exceed $650 million, with potential losses in the UAE reaching as high as $850 million. Dubai was identified as the most affected emirate.
The broker noted that large policies affected would have several primary policy conditions, causing significant variance in losses to insurance companies.
Guy Carpenter estimated that 30,000 to 50,000 motor vehicles were affected by the floods in the UAE, mostly in Dubai. Only vehicles with comprehensive policies will be covered by insurers, as third-party liability policies typically do not cover natural catastrophe perils.
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