The Gallagher Re Cat Analytics team reported on severe flooding and heavy rain that affected several Arabian Gulf countries in April, causing widespread flooding and significant losses throughout the southeastern Arabian Peninsula and surrounding areas.

According to the reinsurance broker, the events have led to an expected influx of motor, commercial and business interruption claims.

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Floods and flash floods had noticeable impacts on transportation, with homes and businesses inundated. Rescue operations were frequent as motorists were stranded amid rising water levels. In several cases, vehicles were washed away and roads collapsed.

In Amman, at least 19 people were confirmed dead in northern Shaqiya and Adam Wilayat. More than 1,400 people were housed in relief centres, and there were reports of individuals stranded. Overall, more than 1,000 people were saved.

Several dams had reached full capacity and were overflowing or were at risk of flooding, including those in North and South Al Sharqiyah, Muscat, Al Dhahirah, and Al Dakhliya.

In the United Arab Emirates, heavy rains led to the cessation of transportation services, especially in Dubai. Dubai International Airport has suspended operations and diverted nearly 50 flights, with hundreds more canceled or delayed. The city’s metro lines were halted, leaving passengers stranded. Ankle-deep water was observed at the Onpassive Metro station.

Commercial shopping centres, including Dubai Mall and Mall of the Emirates, were flooded. Schools across the country were closed for at least two days. Reports indicated that five people were killed, including three overseas workers.

Floods in the Arabian Gulf – what are the market losses?

Using Gallagher Re’s flood model for the MENA region, along with JBA’s post-event footprint, Gallagher Re estimates the market loss for UAE properties to be between $1.8 billion and $2.3 billion. This figure includes discretionary risks and is subject to change due to uncertainty surrounding the estimate.

Likewise, Gallagher Re estimates the loss of the UAE auto market at between $350 million and $650 million. This includes comprehensive policies only, as third party liability auto policies will not be covered. Due to the mobile nature of vehicles, there are additional uncertainties associated with this number.

Read more: Gallagher Re talks about the ‘big picture’ in the reinsurance market

Gallagher pointed out that the UAE witnessed the highest rainfall in 75 years. Rapid urbanization in major cities in recent years has increased stormwater runoff, exacerbating flooding. These losses are equivalent to an industry loss return period of no less than 100 years.

The United Arab Emirates was the worst-hit country in the region, and is expected to account for the majority of the total loss. Oman has also witnessed significant impacts; However, in terms of insured losses, these losses are expected to be minimal compared to the UAE. Qatar, Bahrain and Saudi Arabia also recorded small losses.

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