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Turkey: Insurance body to resolve motor issues in holistic manner

Source: Middle East Insurance Review | Apr 2018

The Insurance Association of Turkey (TSB) will take a holistic approach towards resolving problems faced in motor insurance, said the association’s Secretary General Mehmet Akif Eroglu. Measures will be taken this year so that in 2019, a new page will turn over in the sector, he added.
 
   “We need to find solutions to structural problems so as to have reasonable premiums,” he told the Insurance Gazette in an interview.
 
   “The problem is structural, so the solution must (also) be structural. The price is actually the outcome...We need to take care of the causes and not the consequences,” said Mr Eroglu.
 
   According to TSB’s analysis, there are three basic problems in motor insurance. These are: the frequency and severity of traffic accidents, inadequate premium rates and grey legislative areas that cause many claims to be decided by the courts.
 
   “So we must first reduce traffic accidents,” he said, adding that TSB has been active in sponsoring motor safety education.
 
   He also said that, since the introduction last April of the tariff ceiling and motor risk pool regime, motor premiums have fallen. TSB has shared its views on motor premiums with the government. It feels that because of the premium ceiling, premium rates are 20% below optimal levels, despite a monthly hike of 1.5%. He said the effect of the regime will be seen more clearly this year and expects the motor sector to continue to suffer losses until the structural issues have been resolved.
 
   Mr Eroglu also said that there are structural problems with motor insurance claims being handled by the courts of first instance, regional administrative courts and the Supreme Court as well as arbitration panels. These increase motor insurance cost pressures.
 
   He said that “insurance companies want to pay compensation, but the process is getting longer” as cases are taken to court.
 
   Insurance costs must be predictable. If not, insurers would have difficulty in producing policies in an environment where the cost is unknown, he said.
 
   As not all judges have insurance expertise, the TSB has organised workshops with the Justice Academy in order to share information, techniques and terminology relating to insurance. “We predict that it will benefit not only the insurance companies, but also the judiciary and ultimately the citizen,” said Mr Eroglu.
 
   The TSB has also met the Chairman of the Supreme Court of Appeals, Mr Can Akin, and communicated its requests for close cooperation with the judiciary, to share the issues it faces in the traffic branch. M 
 
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