Insurance companies should contract out fire risk assessments to independent experts, Mr Resit Cakas, chairman of the Insurance Agencies Association (SAB). This is to ensure that enterprises that currently lack fire coverage will be included in the system.
He said that a significant number of potential fire insurance customers is rejected by insurance companies on the grounds of their fire safety code and without appropriate risk analysis. Insurers in Turkey are cautious in their risk acceptance process, he said.
Fire insurance business will not be able to grow under these circumstances. Therefore, the portfolio remains undersized, according to a report by Insurance Gazette citing Mr Cakas.
As for businesses that are eligible to be insured because their fire safety code meets standards, there are problems too, he said.
Fire risk inspections are carried out by the risk inspection units of insurance companies themselves. In many cases, the risk inspection unit is afraid of being held responsible for risk that may occur in the future. Therefore, they are very wary when performing a risk assessment.
Mr Cakas said that this situation indirectly affects SAB members, who then don't make enough effort to grow this class of business.
He made the following suggestions:
- insurance companies should hire external experts to perform risk assessments, replacing inhouse teams, so that more rational evaluation can be made.
- insurance companies can cooperate with fire brigades, occupational safety experts and related NGOs on fire prevention, including training. This is especially because fire is not only a risk but also fire prevention is a social responsibility.
- fire insurance needs to be priced appropriately for this class of business to be viable.