First half results of Turkish insurance market were evaluated with a press conference held by the Insurance Association of Turkey. In his statement, Can Akın Çağlar, President of the Association, highlighted the responsibilities undertaken by the insurance market as a result of recent natural catastrophes. “Insurance is a social cooperation, it creates an environment of stability and trust,” he said.  

Can Akın Çağlar, President of the Insurance Association of Turkey, began his presentation for the press conference with general information on Turkish insurance market. Çağlar said that premium production of the market increased by 12 percent over the same period of last year, up to 23.1 billion TL. He underlined that the market provided an insurance guarantee amount that is 35 times larger than GDP, with a high growth potential and as a result of its role in providing funds for the economy and coverage for especially mega projects.

Çağlar also shared information on the payouts by the market, and stated that the market paid 23.4 billion TL last year. He said that 46.400 claims have been made on a daily basis during 2017, and the market paid 108.8 million TL per day. 

The President continued his speech by discussing the recent developments in Compulsory Traffic Insurance (MTPL), Individual Pension System (BES) and Automatic Enrollment. Reminding that total loss in traffic insurance reached 7.3 billion TL in 11 years; Çağlar said premium production decreased by 1.5 percent during the first six months of 2017, compared to the same period of last year. On the contrary, number of policies increased by 4.9 percent, reaching up to 8.6 million. He underlined that discount in traffic insurance premiums reached nearly 30 percent, considering the inflation rates. He said that the market loss is expected to reach 2.3 billion TL as a result of the price cap regulation and loss ratio to increase up to 125 percent. Highlighting that 11 percent of the accidents (nearly 80 thousand) in the last three years were caused by drivers with at least 3 accident records; Çağlar said that decreasing the number of traffic accidents and increasing premium amounts for bad drivers would be vital for permanent price stability in the insurance market.

Another item on his agenda was Individual Pension System and Auto Enrollment. The President stated that number of participants in BES reached 6.8 million, with fund size standing at 71 billion TL – including state subsidy funds. He said that 6 million employees joined the system as of 26 July 2017 with the initiation of Auto Enrollment this year; and 2.6 million of them decided to stay in the system. Çağlar informed that the rate of withdrawal from the system was 57 percent, listing the reasons for high withdrawal rates as follows: Lack of employer contribution, long vesting periods for incentives, insufficient promotion of the system for employers and employees before initiation, the wrong perception that participants would not be allowed to exit the system after the withdrawal period.

He underlined the importance of the revision of system’s structure to strengthen the system, as well as better information and communication.

During his press conference speech, Çağlar also highlighted the natural catastrophes that occurred in recent weeks and reminded that the entire insurance market and all related stakeholders worked really hard to compensate for the economic losses. According to the statistics he shared, losses reported to the insurance market for the three recent events are as follows: “July 18, Flood in İstanbul: 7 thousand claims, 116 million TL insured loss; July 21, Earthquake in Gökova: 800 claims, 12 million TL insured loss; July 27, Flood and Hail in İstanbul: 22 thousand claims and 168 million TL insured loss.”

Reminding that natural catastrophe risks have grown due to climate change, Çağlar underlined the importance of following matters: “Our citizens and companies face a greater risk of incurring serious losses due to low insurance rates with each passing day, those losses should not be left entirely on the shoulders of the government, insurance policies are not as expensive as they are believed to be, insurance market does not only make payouts for losses but also provides risk management consulting services, everyone should understand the significance of individual pension system for the future welfare of our people, and it is of vital importance to raise the insurance awareness levels and insurance rates both for our citizens and our country.”