Skip to content Skip to Search
Skip navigation

Flood insurance in Dubai under threat says expert

A man moves his belongings from a flooded residential complex in Dubai. It has been reported that only 15% of UAE residents have flood insurance Reuters/Amr Alfiky
A man moves his belongings from a flooded residential complex in Dubai. It has been reported that only 15% of UAE residents have flood insurance
  • Flood-prone areas could be uninsurable
  • Potential impact on house prices, says S&P
  • Smaller insurers may need liquidity support

Insurance companies could opt against covering areas of Dubai that were flooded during last month’s heavy rainfall, according to an expert from the S&P Global Ratings agency.

Some areas remain badly affected since the torrential storm wreaked havoc across the emirate over two weeks ago, with record amounts of rain over a 24-hour period.

It has been reported that as little as 15 percent of UAE residents had home insurance.



The increasing number of storms hitting the region may force the hand of some providers, said S&P’s lead insurance ratings analyst, Emir Mujkic. 

“Obviously if it becomes more frequent then we may see a scenario where insurers stop covering certain areas. But we are not there yet,” he told a media event this week.

Mujkic said the idea of obtaining flood coverage in the UAE pre-2018 was “not very common”, but the inclement weather was happening more often, with a flood weather warning issued earlier this year and more rain forecast for this week.

The UAE experienced its heaviest rains in 75 years last month. The downpour turned main roads, particularly in Dubai, into waterways, leaving motorists stranded and causing widespread damage to commercial and residential properties.

Tatjana Lescova, associate director of corporate ratings at S&P, said the changing weather could create “increasing differentiation between areas”, with people reluctant to risk moving to areas that are more susceptible to flooding.

“It could create some discrepancy,” she said. “It’s also very much a question of reputation for the developer. With insufficient drainage systems and just echoing people’s experiences from different areas, this can have an impact on prices.”

Ranjay Verma, general manager of Armab, chief agent in the UAE for India’s state-owned Oriental Insurance Co, described April’s floods as the worst event for the country’s insurance industry since he moved to Dubai in 2006.

“The impact is going to be very severe on the insurance sector,” he said. “Most insurance companies have been badly hit.”

The UAE Central Bank, which regulates the country’s insurance industry, ordered banks and insurers to allow flood-affected customers to defer repayments on personal and car loans for six months.

Of the UAE’s 60 licensed insurers, about one fifth have capital and liquidity buffers that are only slightly above, or even lower than, the regulatory minimums, S&P Global estimates.

“I wouldn’t be surprised if at least for some of the smaller, less solvent insurers, there could be some liquidity support by the government,” Mujkic said.

Latest articles

Qatar Rwandair

South African Airways denies talks with Qatar Airways

South African Airways has denied it is talking to Qatar Airways about an equity injection, as observers suggest RwandAir is the Qatari carrier’s most likely target. Qatar Airways’ CEO Badr Mohammed Al Meer set rumours racing earlier this month when he revealed that the state-owned airline was “at the final stage of an equity investment” […]

United Arab Emirates President Sheikh Mohamed bin Zayed Al Nahyan, South Korean President Yoon Suk Yeol and his wife Kim Keon Hee watch the Black Eagles, the aerobatic team of T-50 jets belonging to South Korea's air force, during a welcoming ceremony at the Presidential Office in Seoul on May 29, 2024. JUNG YEON-JE/Pool via REUTERS

Trade deal signed during UAE state visit to South Korea

The UAE has signed a trade agreement with South Korea during a two-day state visit by the Emirati president, Sheikh Mohamed bin Zayed Al Nahyan, that has resulted in deals worth billions of dollars being struck between the two countries. The UAE has become the first Arab country to formally sign a comprehensive economic partnership […]

Oman seeks investors for new low-cost airline

Oman plans to launch a new low-cost airline amid a global tourism rebound and the continued expansion of the Gulf state’s aviation sector. In a post on the social messaging platform X (formerly Twitter), the country’s civil aviation authority (CAA) announced an investment opportunity for a new low-cost airline operator in the sultanate. No further […]

The timeline for the $35 billion Ras El Hekma project on Egypt's Mediterranean coast is still uncertain

Egypt and UAE still in talks over $35bn Ras El Hekma deal

Egypt and the UAE are holding talks on issuing contracts for the $35 billion Ras El Hekma development project, according to a news report. “It’s still extremely premature. We are now in the stage of finalising contracts,” Nader El Biblawi, chairman of the Egyptian Travel Agents Association, told Reuters. While no details were given on […]