Erhan Tuncay
description
Transcript of Erhan Tuncay
Erhan TuncayEx Vice Chairman of TCIP’s BoD
(TURKEY)
Saturday, 28.9.2013
May 2010, ISTANBUL
TURKISH CATASTROPHE
INSURANCE POOL
AGENDA
Background of TCIP
Current Structure of TCIP
Basic Figures of TCIP
Emergency Action Plan of TCIP
HISTORY
The devastating Earthquakes in Marmara region on 17th August and 12th November 1999 Insured loss: around USD 800 milionEconomic loss: over USD 10 billionLow insurance penetration (especially for residential risks) Burden on public budgetDecree law no 587 – compulsory earthquake insurance as of 27th September 2000 untill 18th of August 2012As from 18th August 2012 new 6305 Catastrophe Insurance Law
PRE-TCIP
WHY
Reactive solutions versus proactive solutionsShortage of funds in immediate needAllowance of funds to those in need is problematicPolitical and bureaucratic considerations may prevail Government priorities is on getting back to economic and social life
GOVERNMENT’S PRIORITIES
A compulsory earthquake insurance system for homeownersAffordable price for every homeownerTrue risk transfer mechanismClaims-paying capacity to limit government’s exposureBuild national catastrophes reserves by timeimprovement of risk culture and insurance consciousness in publicRely on distribution channels of Turkish insurance industry
ESTABLISMENT OF TCIP
LEGAL AND FINANCIAL BASE OF TCIP
Financed by Marmara Earthquake Emergency Reconstruction Project co-financed by
Turkish GovernmentWorld BankEuropean Bank for Reconstruction and Development
Decree law no 587 – compulsory earthquake insurance as of 27th September 2000. Eureko Sigorta is tendered for the following 5 years till August, 2015As from 18th August 2012 new 6305 Catastrophe Insurance Law
TCIPINSURERREINSURERSALES FUNCTIONSOPERATIONAL SERVICESRISK MANAGEMENT SUPPORTCLAIMS MANAGEMENT
HOUSEHOLDERSRISK MANAGEMENTBEHAVIOUR
AUTHORITIESREGULATION SUPERVISION LEGAL FRAMEWORKRISK MANAGEMENT SUPPORTDISASTER MANAGEMENT
PUBLIC-PRIVATE PARTNERSHIP
STRUCTURE OF TCIP
16 MILLIONHOMEOWNERS
THE TREASURYGENERAL
DIRECTORATE OFINSURANCE TCIP
BOARD OF DIRECTORS
INSURANCE COMPANIES
REINSURANCE
IT
FUND MANAGMENT
AGENCIES BROKERS BANCASSURANCE DIRECT & ADC
CONTRACTUALAGREEMENT
PR
CLAIM OPERATIONS
CLAIM
MANAGEMENT COMPANY
New Parliament law as from 18 August 2012Beside Land Registrar Office and Mortgage transaction, utility services request earthquake policiesPublic perception on public aid has not been changed
AFAD (Disaster and Emergency Management Presidency) has been establisheddecentralized cat managementIncreased cooperation between AFAD and other instittionsIncreased involvement into national earthquake issuesParticipating into Istanbul Disaster and Emergency Action PlanImproved the terms and conditions of Tariff and Earthquake General Conditions
PROGRES
AFADCOORDINATING
NATIONAL ACTIVITIES
DASKMerkez
ACENTALARCOMPANIES / AGENTS
INTERNETINTERNETINTERNETINTERNET
DMZDMZWEB SERVERWEB SERVERWEB SERVER
DATABASE
J2EE APPLICATIONSERVERJ2EE APPLICATION
SERVER
CALL CENTERCALL CENTER
LEASED LINELEASED LINELEASED LINELEASED LINE
FIREWALLFIREWALL
DISASTER RECOVER CENTER -
WANWANWANWAN
DMZDMZ
WEB SERVERWEB SERVERWEB SERVER
DATABASE
J2EE APPLICATIONSERVER
FIREWALLFIREWALL
REPLICATION
LDAP
LDAP
ISTANBUL ANKARA
IT STRUCTURE
State of the art technology
99,9% service level
Investing into satellite and mobile technologies
30 INSURANCE
COMPANIES
APPX. 27.000 USERS
REAL TIME ON-LINE
OPERATION
IT INFRASTRUCTURE
Continuous improvement
Various level Back-up services, data and programs
Disaster Recovery Center is able to be in full operation within 2 hours
ACVIEVEMENTS and NEW LAW
ACHIEVEMENTS
Improved penetration from 4% to 35%Increased public awareness for earthquake and insuranceCentralized marketing activities and brand managementKept pricing at affordable levelClaims-paying capacity: USD 4 billionSolid reinsurance program Operational efficiency Improved coordinated work between the public agencies, the insurance industry, universities, etc..Model structure for effective public-private partnershipFinding quality capacityEthical sensitivity
NEW LAW
Inforce since 18th of August 2012: flexible framework enabling improvements on product and structure Improve awareness and sign of state supportIncreased check points in utility servicesAdditional natural perils to be included in case of market shortageAble to provide reinsurance support for natural perilsTreasury to act as the last resort by providing reinsurance support Able to establish alternative distribution channel Government aid being subject to having TCIP policyOther articles on cat response, scientific research, international coordination
NATIONALSTRATEGIC PLAN
FOR 2023
INSURABLE PROPERTY
In general meaning, intended for dwellings that remain inside the boundaries of the municipalities;Building constructed as dwellings on lands subject to private ownership and has registered title deed,Independent sections within the context of the Condominium Law No: 634,Independent sections situated inside residental buildings but used as small business establishment, bureau and similar purposes,By reason of natural disasters, properties built by the government or built by housing credit.
UN-INSURABLE PROPERTY
The properties that fall outside the Compulsory Earthquake Insurance are as follows:The dwellings belonging to public body and institutions,The dwellings built in residential areas of a villages,The dwellings entirely used for commercial and industrial purposes (Block of offices, business center, administ.sevice buildings, training center buildings etc.),The dwellings that are still under construction,
COMPULSORY EARTHQUAKE INSURANCE
INSURABLE PROPERTY
With the Compulsory Earthquake Insurance;
EarthquakesFires as a result of earthquakesExplosions as a result of earthquakesLandslides as a result of earthquakesTsunami as a result of earthquakes
INSURABLE PROPERTY
Building onlycausing material damages to the insured buildings are covered up to the sum insured by TCIP including foundations, main walls, common walls separating independent sections, ceilings and bases, stairs, platforms, halls, roofs, and chimneys.
COMPULSORY EARTHQUAKE INSURANCE
SCOPE OF COVER AND TARIFFICATION
TYPE OF CONSTRUCTION
Zone1
Zone2
Zone3
Zone4
Zone5
Steel, RC 2.20 1.55 0.83 0.55 0.44Masonary 3.85 2.75 1.43 0.60 0.50Others 5.50 3.53 1.76 0.78 0.58
TYPE OF CONSTRUCTION
UNIT ONSTRUCTION COST PER M²
Steel, RC 700 TLMasonary 500 TLOthers 260 TL
Type of construction
Sum InsuredTurkish Lira
Zone1
Zone2
Zone3
Zone4
Zone5
Steel or R/C 70.000 164 119 68 49 41Masonary 50.000 202 148 82 40 35Others 26.000 153 102 56 30 25
Prices for a 100 square meter dwelling
SIMPLE TARIFFEarthquake ZoneConstruction TypeM² of apartment
SCOPE OF COVEROnly Earthquake and following
Fires ExplosionsLandslidesTsunami
INSURABLE PROPERTYOnly Building
No contentsNo BI
BASIC FIGURES
Total No of policies
5.950.000Total coverage
151.490.500.000 €Annual premium
239.666.000 €Avg. Sum insured
25.465 €Avg. Premium
40 €Total Claim Files
20.622Total claims paid
56.996.000 €
* as 06.09.2013
BASIC FACTS OF COVERAGE
Compulsory for household owner’s Only residential buildingsOnly earthquake risk, no flood, windstorm, clearance etc.Only building coverage, no contents, no business interruption, etcOnly TCIP is providing earthquake cover to households up to SI 150.000 TLFirst loss based policyRecently, Renewal Discounts provided
** Euro 2,714
BASICS OF TCIP
PORTFOLIO
PORTFOLIO DIST FOR EQ ZONES PORTFOLIO DIST PER REGIONS ZONE 5
1,0%
ZONE 416,0%
ZONE 310,9%
ZONE 145,7%
ZONE 226,4%
EAST ANATOLIA3,6%
MEDITERRAIN10,0%
EAGEN14,0%
MARMARA42,8%
BLACKSEA7,6%
SOUTH EAST ANATOLIA
3,0%
CENTRAL ANATOLIA
19,0%
159 2.
428
2.12
8
2.02
2
2.09
0
2.41
7
2.55
4
2.61
8
2.84
4
3.43
6
3.28
7
3.72
5 4.78
6 5.95
0
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
NUMBER OF POLICIES (000)
737.969 572.8931.164.909
1.543.486 1.707.403 2.046.411
3.252.134
227.511 179.717
461.681
610.854805.077
1.135.179
2.528.876
0
1.000.000
2.000.000
3.000.000
4.000.000
5.000.000
6.000.000
7.000.000
GÜ
NEY
DO
ĞU
DO
ĞU
AN
ADO
LU
KARA
DEN
İZ
AKD
ENİZ
EGE
İÇ A
NAD
OLU
MAR
MAR
A
UNINSURED HOMES INSURED HOMES INSURANCE PENETRATION
%23
,5 %
23,8 %
28,3 %
28,3 %32
,0 %35
,5
%43
,7
PENETRATION
6.000.000 policies
Increase communication and public relation activities
10.000.000 number of householders to reach
Excelling in claim management
Increased use of Technology
TCIP IN NEAR FUTURE
WhySecure un-interrupted service availabilityPlan “Pre-During-After” Earthquake activitiesPlan available resources according to size of earthquakePlan coordination activities with related Institutions
EMERGENCY ACTION PLAN
LESSONS
Operational capacity is as important as financial capacityOutdated operational manualsProcedures must be simple and leanApplication of sum insured or indemnity limitsNecessity for collaboration between;
Industriescompanies and public officescities-countries
Lack of;adjusting capacitytechnologyField knowledge
LESSONS
Less loss of lives in the countries with stringent building codes (Chile and New Zealand)Multiple events are not unusual (1999 Turkev and 2011 New Zealand)Secondary risk causing severe damages (tsunami, aquafaction) Modeling has it’s limitationUnderestimated scenarios
EconomicPoliticalDemographic
Ambiguity on expectations from insurance industryImportance of strong construction industry
NEW ERA IN CAT MANAGEMENT
12.01.10 7.0 Haiti Earthqauke 27.02.10 8.8 Chile Earthquake04.09.10 7.1 New Zealand Earthquake
11.01.11 Australian Flood11.03.11 8.9 Japan Earthquake22.02.11 6.3 New Zealand Earthquake
DASKHASAR DANIŞMAKURULU
SORUMLULUK BÖLGELERİ
SORUMLULUK BÖLGELERİ
SORUMLULUK BÖLGELERİ
SORUMLULUK BÖLGELERİ
SORUMLULUK BÖLGELERİ
YÖN
ETİM
PLA
TFO
RMU
EĞİT
İM
PLAT
FORM
LİSANSLI EKSPERLER
HASAR TESPİT UZMANLARI
SORUMLU EKSPER BÜROLARI
Strong and efficient client contact
Emergency call center services
Fast and accurate claim adjustingClaim adjusting resources
MainEmergency
Collaboration with reinsurers
TO IMPROVE DATABASE
TO IMPROVEUNDERWRITING
TO INCREASE COORDINATION W/ INSURANCE INDUSTRY
CAT EVENT CLAIM MANAGEMENT
TO INCREASE MODELLING CAPACITY
TCIP EMERGENCY CALL CENTER
OBSTACLES IN MASSIVE CLAIM OPERATION
Limited number of claim adjustersLong period of training and educationLimited number of training coursesNo promise of income for adjusters To be raedy for service in un-known time in the future
TRAINING PROGRAMS AND INSTITUTIONS
Construction knowledgePrinceples of insurance – TCIPClaim adjusting knowladgeClaim database modelling
UniversitiesInsurance InstitutesEngineering associationsClaim adjusters association
SOCIAL
RESPONSIBILTY
AWARNESS
IN PROFESSIONALS
OBSTACLES
FACE TO FACE COMMUNICATON
LOCAL COMMUNICATION
BRAND AWARENESS
BE CLOSE TO INSURANCE CO’S
INC POPULARITY OF EQ INSURANCE
GET SUPPORT OF PUBILIC OPINION LEADERS
TOUCHING YOUTH GENERATION
CITIES IN CONTEST EARTHQUAKE SEMINARS
EARTHQUAKE TRAILER
THE HURRIYET TRAIN
CAMPAIGN FOR AGENCIES AND BANK BRANCHES
TCIP LISTENING THE INDUSTRY
FREQUENT APPEREANCE ON TV
TCIP ON SOCIAL MEDIA
MEETING W/ ACADEMICIANS
COLLABORATION W/ UNIVERSITIES
3.NATIONAL FILM CONTEST
TCIP MEETING YOUTH
FUTURE COMMUNICATION PLAN
CONTINUES COMMUNICTION AND PUBLIC RELATION
CONTINUES COMMUNICATION AND PUBLIC RELATIONS
CHALLENGES AND OBJECTIVES
OBJECTIVES
Increasing number of policiesExcelling in Cat ResponseEstablishing strong synergy between institutions
Public officesInsurance companies, intermediariesClaim adjusters
Increasing Reinsurance capacityUsing alternative claim financing toolsImplementation of new projects
CHALLENGES
Low insurance awarenessEnforcement of new Catastrophe Insurance Law Low penetration rateRestructuring of TCIP after a decadeAligning with national databases Effective control level in public officesEnsuring sound reconstruction activities after claim paymentHigh cost of maintaining contingency capacity
TURKISH CATASTROPHE
INSURANCE POOL