Compulsory motor third-party liability insurance premiums have increased by 5% since 1 January 2018.
The increase was announced last month by Deputy Prime Minister Mehmet Simsek who emphasised the importance of insurance premiums to be able to cover claims paid by insurance companies, for the system to be sustainable.
He said that the ceiling on motor premiums would remain for this year, and that there will continue to be the monthly increase of 1.5% applied to the premium ceiling.
The ceiling was imposed last April to curb a sharp rise in premium rates. In addition, the Motor Risk Pool, which is designed to distribute premiums and losses of vehicles in the high-risk category among all insurance companies in a balanced manner, was created in July. Mr Simsek said that the premium ceiling and the pool have allowed insurers to charge reasonable premiums.
He said that the insurance companies' financial situation in the compulsory traffic insurance branch is monitored by the Undersecretariat of Treasury.
He disclosed that insurance companies had lost about TRY240 million (US$63.3 million) in the first nine months of last year. This loss corresponds to 3% of motor premiums for the period. He said that the losses were caused by judicial decisions on claims. He added that the companies' technical loss trend would have continued in the last three months of 2017.