Turkey: Motor 3rd party premium ceiling to rise by 5%+5% this year
Source: Middle East Insurance Review | Jan 2018
The premium ceiling for compulsory motor third-party liability insurance will be increased by 5% at the start of the new year and by another 5% in the second half of 2018.
The premium increases are to cater for weaker exchange rates and higher prices of motor spare parts, according to Haberturk.
The premium ceiling was implemented with effect from 12 April 2017 following complaints of skyrocketing premiums in the previous two years. The new pricing system has helped to push down the average insurance premium to around TRY550 (US$143.5) per year. Under the system, good drivers receive an incentive, while drivers with a poor traffic record have to pay higher premiums.
Deputy Prime Minister Mehmet Simsek said that the implementation of the price ceiling has been a success. Insurance premiums have decreased by about 20% on average. “We want the sector to be healthy and sustainable,” he said, adding that the government would evaluate the system in the coming period.
Turkey Insurance Association (TSB) President Can Akin Caglar, said that motor insurers had seen losses of TRY7.3 billion in the last 11 years. Motor losses have been estimated to reach TRY2.1 billion last year. He said: “So we are asking for an increase in the tariff of at least as much as the increase in inflation in 2018. We are also working on reducing traffic accidents.” M
TRY1 = US$0.26