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Dubai flooding chaos could hit trade insurance rates, warns TMU Management

Dubai flooding chaos could hit trade insurance rates, warns TMU Management

Inbound tour operators and travel providers based in Dubai, or international tour operators and other sellers offering Dubai products, may find that the worst is not yet over as the weather clears up in Dubai. TMU Management, the data-driven insurance intermediary specialising in travel, has today issued a warning to the travel trade they are very likely to see increases in rates when applying for Package Travel Regulation compliant insurance.
Sami Doyle, CEO & Co-Founder of TMU Management, comments: “Who’d have thought that flooding could be an operational risk in the middle of a desert? Whilst this may technically be the worst rain in 75 years in the UAE, underwriters are unlikely to forget about that anytime soon. At this early stage it would be hard to say how much of an increase to expect, but for sure it won’t be going down when you mention Dubai. And it could easily go up enough to make sellers think twice when pricing future sales. Certainly we’d advise to expect a noticeable increase.”

What does TMU Management recommend to address likely hikes? Are there any steps the trade should be taking now? Doyle continues “firstly, just simply be aware that this could come up with your insurer whenever it is time to renew – perhaps even get that conversation going now, think about shopping around, and factor this into your future costs and therefore pricing. And secondly ask yourself, am I perhaps overexposed this – or indeed any – destination? Civil unrest, terrorist attacks, freak weather conditions, or just plain fashions changing, all of these have previously weakened or wiped out what had up to that point seemed like great business models.”

Additionally, Sami Doyle advises that having accurate data to report to insurers is vital in demonstrating the limit to the provider’s exposure to concentration of risk related to a shock or geographic event.