Turkey: Average MTPL premium falls by 24% in wake of price cap
Source: Middle East Insurance Review | Oct 2017
The average premium for mandatory third party liability motor insurance (MTPL) fell by 24% from TRY864 (US$253) in March to TRY660 in July, since the implementation of a premium ceiling on 12 April, said Deputy Prime Minister in charge of the economy Mehmet Simsek.
Mr Simsek said that MTPL premiums are now at a reasonable level and that measures introduced by the government have helped to resolve problems in motor insurance.
Following the implementation of the premium cap, some insurers had been afraid to cover high-risk vehicle groups. This problem has been resolved with the establishment of a risk pool in July.
He said that the pool represents 30% of total MTPL premiums, and that the average premium of the vehicle categories covered by the pool has decreased by 27% between March and July this year.
The sharing of premiums and claims paid among insurers in the pool is calculated in two parts. Under this model, 50% of the pool will be based on the market share of motor insurers in the last three years. The remaining 50% is distributed equally among the insurers.
For a start, the share is calculated based on the traffic insurance premiums for the period 1 January 2014 to 12 April 2017. The share will be calculated at the beginning of each year and will remain constant throughout the year. M
TRY1 = US$0.29