Türkiye: As technical losses mount in mandatory auto insurance business, insurers look to liberalised pricing
Source: Middle East Insurance Review | May 2024
Compulsory motor third-party liability insurance business, also referred to as traffic insurance in Türkiye, chalked up a technical loss of TRY13.7bn ($424m), after offsetting investment income, in 2023. The loss widened from TRY11.7bn in 2022, Insurance Association of Türkiye president Ugur Gulen said when he reviewed the performance of the insurance industry.
When investment income was excluded, no motor insurer made a profit in the traffic branch and the technical loss reached TRY33bn, he said.
He also said that the number of dispute cases referred for arbitration in this branch jumped from 294,000 in 2021 to 501,000 in 2022 and 571,000 in 2023.
The solution to these problems, that have plagued the traffic branch for many years, is to switch to free pricing, he believes.
“We think that we will make progress in this regard this year,” he said.
The comprehensive motor insurance branch, also called automobile insurance, attracted attention with the rapid hikes in vehicle values in 2023.
Mr Gulen said, “The increases in vehicle prices in the automobile insurance branch have led to an increase in the compensation paid. A technical profit of TRY29.7bn was posted in this branch in 2023, including investment gains. Excluding investment income, the technical profit was approximately TRY7.9bn.” M