A new NIQ (NielsenIQ) report has revealed that rising insurance premiums in the UAE are reshaping consumer spending habits in 2025. As premiums—especially for auto insurance—continue to rise, individuals are adjusting how and where they spend, focusing more on long-term financial stability than short-term gains.
Over half of the surveyed car owners in the UAE reported that their insurance premiums have increased. More than 80% expect them to rise further. These figures are based on an online survey conducted in March 2025 with 300 car owners, carrying a 4.75% margin of error at a 90% confidence level.
The report, by market intelligence firm NIQ, outlines how UAE consumers are navigating financial pressure and choosing value-focused strategies.
UAE Consumers Face Financial Pressure from Premium Hikes
The rising insurance premiums are not just numbers on paper. They’re pushing consumers to rethink their monthly budgets. According to NIQ’s Rahul Dixit, Strategic Analytics & Insights leader for the Arabian Peninsula and Pakistan, “While inflation is beginning to ease, its impact on household budgets remains.”
As a result, consumers are changing their definition of value. Instead of looking for the lowest upfront prices, more people are now focusing on durability, predictability, and long-term savings.
Auto Sector Sees the Sharpest Rise in Premiums
The auto insurance sector has seen the steepest increases. NIQ’s data reveals that 76% of UAE consumers are now interested in multi-year fixed-rate auto insurance policies. This allows them to lock in today’s rates and avoid future hikes.
This growing interest in cost-stable insurance products indicates a broader trend in the market. Consumers want to take back control by protecting themselves from future volatility.
Consumers Seek Smarter, Longer-Term Financial Strategies
NIQ’s report highlights three key changes in UAE consumer spending due to rising insurance premiums:
1. Focus on Long-Term Value Over Short-Term Deals
About 70% of surveyed consumers are now willing to pay more for products that last longer. This means that value is now tied to lifespan and reliability, not just discounts or promotions.
In response, businesses are being urged to move beyond traditional marketing tactics. Simply offering lower prices isn’t enough in an economy where context, trust, and timing influence purchase decisions.
2. Demand Grows for Loyalty and No-Claim Incentives
Many consumers are actively seeking loyalty rewards and no-claims discounts to reduce their insurance costs. These strategies are seen as practical ways to maintain coverage while easing financial pressure.
Insurers offering such perks are more likely to retain customers who feel valued and rewarded. It also shows how important customer experience is becoming in the financial services sector.
3. Rising Interest in Additional Income Sources
NIQ’s data also connects the insurance premium rise to a wider regional trend. Across the Middle East and Africa, 76% of consumers are looking for new income sources to offset their financial challenges. From freelancing to gig economy work, people are diversifying income like never before.
This shift toward economic self-protection is a critical sign that households are no longer depending solely on their main jobs. They’re using multiple methods to build safety nets, with insurance and savings being a big part of that strategy.
The “Say-Do” Gap: Businesses Need Better Insights
While consumers say they want better value, NIQ warns businesses of the “say-do” gap — the difference between what consumers claim they will do and what they actually do.
To close this gap, brands need to leverage real-time data and insights, not just surveys or guesswork. Rahul Dixit notes that understanding the psychological drivers behind purchases is now just as important as pricing and product features.
Emotional Value Becoming Just as Important
Beyond economic value, emotional factors like trust, consistency, and control are influencing buying decisions. Consumers want peace of mind, especially during economic uncertainty.
Insurance policies that reflect these desires—such as those with fixed premiums and flexible terms—are more likely to appeal to today’s cautious buyers.
UAE Businesses Must Adapt to Survive and Thrive
The rising insurance premiums are not only a consumer issue. They’re a business challenge, too. Companies across the UAE need to:
- Reposition their value propositions
- Create insurance offerings that promote control and transparency
- Use behavioural insights to align with new spending patterns
Insurers and other financial service providers who adapt quickly can win loyalty and trust, even in a tough market.
Conclusion: A Shift Toward Strategic Spending
The NIQ report is a clear signal: rising insurance premiums are changing how people in the UAE shop, save, and plan.
Instead of panic spending or cutting essentials, consumers are adopting more thoughtful, strategic financial habits. Businesses that want to stay relevant must not only understand these shifts but act on them with data-backed solutionsand customer-first innovation.
As inflation slowly cools and uncertainty persists, one thing is clear—value is no longer just about price, and insurance is no longer just protection—it’s a signal of how people are shaping their financial futures.
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