TCIP TURKISH CATASTROPHE INSURANCE POOL

1
TCIPTURKISH CATASTROPHE INSURANCE POOL
Mr. Okan UTKUERI okanu_at_garantisigorta.com.tr
2
AGENDA

• History
• Objectives
• Structure of TCIP model
• Managers role
• Policy coverage
• Tariff system
• Figures statistics
• Key challanges

3
Natural hazard risk world-wide
4
SEISMIC HAZARD ZONES
5
HISTORY

• The devastating earthquake in Marmara on
  17thAugust and 12th November 1999
• An insured loss of around USD 800.000.000
• An economic loss of around 6 billions of USD
• In last century 115 earthquakes above 5.0 richter
  scale

6
GOVERNMENTS PRIORITIES

• A compulsory earthquake insurance system for
  homeowners
• Affordable price for every homeowner
• True risk transfer mechanism
• Claims-paying capacity to limit governments
  exposure
• Build national catastrophes reserves by time
• Rely on distribution channels of Turkish
  insurance industry

7
TCIP

• Decree Law No 587 Compulsory Earthquake
  Insurance as of 27th September 2000
• Foundation of TCIP effective from 08.08.2000
• Managed by Milli Re for first 5 years

8
OBJECTIVES

• Cover at reasonable prices for people with
  average income
• Less government expenditure for catastrophies
• Ground for long term fund accumulation
• Sharing the financial burden of earthquake with
  reinsurance markets
• Improvement of risk culture and insurance
  consciousness in public

9
Public / private partnership
Insurer / Reinsurer Risk transferRisk
assessmentRisk management supportClaims
management
TCIP
Authorities Regulation and Supervision Legal
frameworkRisk management supportDisaster
management
Individual Risk ManagementBehaviour
10
STRUCTURE
CLAIM ADJUSTERS
AGENCIES, BROKERS, BRANCHES
Manager of Pool An insurance or a reinsurance
company
Insurance Companies
TCIP
Treasury General Directorate of Insurance
Management Board
11
NEW MANAGER

• Garanti Sigorta was awarded as a new manager
  following tender in August 2005 for the next 5
  years

12
MANAGERS ROLES

• IT
• Software development
• Hardware, network and system management
• Claim Operations
• Reinsurance
• Marketing PR Activities
• Fund Management accounting
• All daily operations

13
MANAGERS ROLES

• Improving service quality and efficiency
• Enabling high-tech solutions on claim management
• Maintaining Emergency Operation Planning
• Establishing earthquake claim database
• Training programs for claim adjusters

14
IT STRUCTURE

• Real time online connection
• Disastor Recover Center in another location
• Policy sales throughout Turkey by 24 companies
  and their appx. 13.000 agents
• System also enables
• Accounting
• Claims handling
• Reporting
• Provides Statistical data

15
POLICY COVER

• Compulsory for household owners
• Only residential buildings
• Only earthquake risk, no flood, windstorm etc
• Only building coverage, no contents, BI, etc

16
TARIFF STRUCTURE

• Three parameters
• Earthquake risk zone
• Construction type
• m2 of household
• Deductible of 2 of SI
• Maximum policy limit is 110.000 YTL

17
BASIC FIGURES

• Total No. of Policies
  2,562,242
• Total Coverage (YTL) 112,625,286,730
• Total Annual Premium (YTL)
  213,430,621
• Avg. Coverage (YTL)
  43,955
• Avg. Premium (YTL)
  83
• Growth by number of policies ()
  1.75
• Renewal Rate ()
  35
• Total number of Paid Claim Files 9,111
• Total Claims Paid (from 2000)(YTL) 17,901,175

18
PREMIUM PRODUCTION
19
POLICY NUMBERS
31.03.2007 Current Valid Policy Number
20
POLICY NUMBERS
Valid Policy number as 31.03.2007 2.562.242
21
MONTHLY FIGURES
22
MONTHLY FIGURES
23
GEOGRAPHICAL SPREAD
24
RISK ZONES
25
PENETRATION
12,990,000 houses 2,588,726 policies
26
CLAIMS HISTORY
27
Key Challanges

• Public awareness
• Penetration rates
• Legal framework
• Insurance industrys cooperation and support
• Political support
• Risk management
• Reinsurance placements

28
The role of authorities

• Legal framework
• Laws and regulations Tax-free reserves for
  natural hazards Building codes, land use
  planning rules Climate change mitigation and
  adaption
• Risk management support
• Loss mitigation works Early warning
  systems Experience sharing on a global level
• Disaster Management

29
www.dask.gov.tr

• ENGLISH VERSION OF THE WEB SITE IS
  UNDER-CONSTRUCTION

30

• Thanks for your attention...