Turkey: Insurers more cautious following a string of fires
Source: Middle East Insurance Review | Oct 2018
Insurers are being more vigilant over fire claims and have partially suspended accepting factory owners as their clients.
A string of factory fires across Turkey has given rise to speculation that arson was involved in several cases in a bid to receive insurance payouts, reported Daily Sabah.
Since January, nearly 100 factories across the country have caught fire and although causes vary, it is widely speculated on social media and by media outlets that the owners of factories on the brink of bankruptcy deliberately started the fires to claim insurance money.
The Turkish Association of Insurance Agents is seeking data from its members to compare figures related to factory fires in a bid to thwart payment for suspicious fires.
Insurers said that it is more viable for factory owners to be paid for fire insurance claims than to declare bankruptcy over unpaid loans. Even in cases of sequestration, businesses indebted to banks fail to repay in full, as factories are sold well below their original value.
Mr Irfan Uzun, head of the Turkish Association of Insurance Agents said factories pay a rather low amount of premium to insure their worth, say, TRY1m ($154,107), and laws allow them to be compensated the original value.
“Manufacturers seek money from insurance companies when their business falters, but insurers are aware of this and try not to allow them,” he said.
Mr Uzun said existing clients owning factories will have no problems, but insurance agents have stopped accepting new clients as well as clients who wanted to resume paying premiums after halting payments for some time. M
TRY1 = $0.15