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					                                 TURKISH
                             CATASTROPHE
                          INSURANCE POOL
                                    (TCIP)




        LLOYDS
MARKET DEVELOPMENT TRIP
        TURKEY               May 2010, ISTANBUL
 WEDNESDAY 6 JULY 2011
HISTORY



    Overview
       History
       About TCIP (structure, technology, tariffication,
       portfolio, reinsurance)
    Challenges and future needs
    Working with Lloyd’s
    Next steps - Q&A
HISTORY

    The devastating Earthquakes in Marmara region on 17th August and 12th
    November 1999
    Insured loss: around USD 800 milion
    Economic loss: over USD 10 billion
    Low insurance penetration (especially for residential risks)
    Burden on public budget
                                      SEISMIC HAZARD ZONES OF TURKEY
             CENTER
               OF
            COMMERCE

               HIGH
            DENSITY OF
             INDUSTRY
THE NEW SCHEME


    THE COMPULSORY EARTHQUAKE
         INSURANCE SCHEME                           OBJECTIVES
             Basic Features
    A stand-alone compulsory               Providing insurance for all
    earthquake insurance product for       residential buildings at affordable
    homeowners                             prices
    Affordable prices                      Immediate compensation
    (giving credit to both risk and        Risk sharing
    solidarity based pricing)
                                           Alleviating the burden on public
    Basic coverage for damage to           budget
    building
                                           Building up reserves for
    Reliance on distribution channels of   catastrophes
    insurance industry
                                           Raising awareness and improvement
    True risk transfer mechanism           in general insurance culture
    Control at land registry and bank
    credit
    Buildings in villages are excluded
ESTABLISMENT OF TCIP


    LEGAL AND FINANCIAL BASE OF TCIP         PUBLIC-PRIVATE PARTNERSHIP


     Financed by Marmara Earthquake
     Emergency Reconstruction Project
     co-financed by
          World Bank                                     HOUSEHOLDERS
          Turkish Government                              RISK MANAGEMENT
          European Bank for                                  BEHAVIOUR

          Reconstruction and
          Development

     Decree law no 587 – compulsory
     earthquake insurance as of 27th
     September 2000.                          INSURER             TCIP       AUTHORITIES
                                             REINSURER                    REGULATION SUPERVISION
                                             SALES FUNCTIONS                 LEGAL FRAMEWORK
                                          OPERATIONAL SERVICES           RISK MANAGEMENT SUPPORT
                                        RISK MANAGEMENT SUPPORT            DISASTER MANAGEMENT
                                           CLAIMS MANAGEMENT
STRUCTURE OF TCIP

                                                                       REINSURANCE
      THE TREASURY
          GENERAL
       DIRECTORATE OF
         INSURANCE                                                    FUND MANAGMENT

                                           TCIP
                                     MANAGEMENT BOARD                          IT
       CONTRACTUAL
        AGREEMENT

                                                                               PR


                                                                           CLAIM




                                  INSURANCE
                                  COMPANIES

                                                                    CLAIM
                                                                  OPERATIONS
                                          BANC
     AGENCIES           BROKERS                    DIRECT & ADC
                                       ASSURANCE




                            HOUSEHOLDERS
SCOPE OF COVER AND TARIFFICATION


       SCOPE OF COVER                                INSURABLE PROPERTY                        SIMPLE TARIFF
    Only Earthquake and                                  Only Building                      Earthquake Zone
    following                                                No contents                    Construction Type
              Fires                                          No BI                          M² of apartment
              Explosions
              Landslides
              Tsunami



  TYPE OF                  Zone        Zone       Zone      Zone         Zone   TYPE OF               UNIT ONSTRUCTION
  CONSTRUCTION              1           2          3         4            5     CONSTRUCTION             COST PER M²

  Steel, RC                2.20            1.55   0.83       0.55        0.44   Steel, RC                  590 TL

  Masonary                 3.85            2.75   1.43       0.60        0.50   Masonary                   425 TL

  Others                   5.50            3.53   1.76       0.78        0.58   Others                     220 TL


 Prices for a 100 square meter dwelling

      Type of               Sum Insured             Zone            Zone         Zone          Zone           Zone
    construction             Turkish Lira            1               2            3             4              5
  Steel or R/C                    59.000            140             101           59           42              36
  Masonary                        42.500            174             127           71           36              31
  Others                          22.000            131             88            49           27              25
PORTFOLIO
                                                                                                                                                                                                              % 35,1

                                                                                         PENETRATION RATES                                                                                                                                  % 26,8
                                                                                                                                                                                                                               1.549.881

                 COMPULSORY EARTHQUAKE POLICIES (.000)
                                                                                         INSURED DWELLINGS
                                                                                         TOTAL DWELLING
                                                                 3.436           3.479
                                                                         3.287                                                                                          % 29,5
                                                                                                                                                                         656.385
                                                                                                                                    25,3
                                                                                                                                 % 516.837




                                                                                                                                                                                                                                              12.988.663
                                                         2.844




                                                                                                                                                                                                                   4.416.073
                                     2.417 2.554 2.618
         2.428                                                                            319.890
                                                                                         % 19,2
                 2.128 2.022 2.090                                                                                                                                                       % 18,7
                                                                                                                                                                                            239.453




                                                                                                                                                                             2.227.055
                                                                                                                                       2.045.662
                                                                                                                                                   % 13,5




                                                                                                  1.663.126
                                                                                                                                                   102.166
                                                                                                              % 15,9
                                                                                                               95.172




                                                                                                                                                                                                  1.282.096
                                                                                                                                                              757.099
                                                                                                              ANATOLIA 597.554
   159




                                                                                                                                    EAGEN
                                                                                           MEDITERRAIN




                                                                                                                                                                                             BLACKSEA
                                                                                                                                                   SOUTH EAST




                                                                                                                                                                                                               MARMARA
                                                                                                                                                                         ANATOLIA
                                                                                                                                                                         CENTRAL
                                                                                                                                                                                                                                           TURKEY




                                                                                                                                                    ANATOLIA
                                                                                                                EAST
  2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
                                                                                                                                                                                                                                             IN
                                                                                                                                                                                                                                           GENERAL

                                                                                                                         PORTFOLIO DIST FOR EQ ZONES
                                                                                                                                                      ZONE 5

         Total No of policies                                     3.5 mio
                                                                                                                                                      0,9%


         Annual premium                                  214 mio USD                                                                                                                                                                         ZONE 1
                                                                                                   ZONE 4                                                                                                                                    47,8%
         Avg. Sum insured                                 38.000 USD                               16,1%

         Avg. Premium                                              62 USD
         Total Claim Files (paid)                                  11.250
         Total claims paid                                   13 m USD
                                                                                                                   ZONE 3
                                                                                                                   10,5%

                                                                                                                                                                                             ZONE 2
                                                                                                                                                                                             24,7%
IT INFRASTRUCTURE
                                                                               IT STRUCTURE
                   ACENTALAR AGENTS
                   COMPANIES /               CALL CENTER




                      INTERNET               LEASED LINE

    ISTANBUL                                                                       ANKARA
        DASK                                                         DISASTER RECOVER-CENTER
       Merkez
                  FIREWALL                                                       FIREWALL

                 WEB SERVER                                                    WEB SERVER
                DMZ
                                                                           DMZ

                                                               WAN

         J2EE APPLICATION J2EE APPLICATION                                  J2EE APPLICATION
             SERVER           SERVER            LDAP                            SERVER


                                                                     LDA
                                                 REPLICATION               P
                      DATABASE                                                   DATABASE




     Various level Back-up
     services, data and programs
     Disaster Recovery Center is
     able to be in full operation
     within 2 hours
ACVIEVEMENTS




                            MAJOR ACHIEVEMENTS OF TCIP

       Improved penetration from 4% to 26%
       Increased public awareness for earthquake and insurance
       Centralized marketing activities and brand management
       Kept pricing at affordable level
       Claims-paying capacity: USD 3,3 billion
       Solid reinsurance program
       Operational efficiency
       Improved coordinated work between the public agencies, the insurance
       industry, universities, etc..
       Model structure for effective public-private partnership
NEW ERA IN CAT MANAGEMENT


            LESSONS LEARNT                             LESSONS LEARNT

   Less loss of lives in the countries with   Operational capacity is as important
   stringent building codes (Chile and        as financial capacity
   New Zealand)
                                              Outdated operational manuals
   Modeling has it’s limitation
                                              Necessity for collaboration between;
   Underestimated scenarios
                                                     Industries
        Economic
                                                     companies and public offices
        Political
                                                     cities-countries
        Demographic
                                              Lack of;
   Multiple events are not unusual (1999
   Turkev and 2011 New Zealand)                      adjusting capacity
   Secondary risk causing severe                     technology
   damages (tsunami, aquafaction)                    Field knowledge



   12.01.10 7.0 Haiti Earthqauke              11.01.11 Australian Flood
   27.02.10 8.8 Chile Earthquake              11.03.11 8.9 Japan Earthquake
   04.09.10 7.1 New Zealand Earthquake        22.02.11 6.3 New Zealand Earthquake
CAT EVENT CLAIM MANAGEMENT

 Strong and efficient
 client contact                                                          DASK
       Emergency                                                                              HASAR
                                                                                             DANIŞMA
       call center                                                                            KURULU
       services
 Fast and accurate
 claim adjusting                       LİSANSLI            SORUMLU EKSPER BÜROLARI
                                      EKSPERLER
 Claim adjusting
 resources




                                                                                                                   YÖNETİM PLATFORMU
                                                                                                        PLATFORM
                                                                                                         EĞİTİM
       Main                             HASAR
                                       TESPİT
       Emergency                      UZMANLARI

                                                     SORUML    SORUML    SORUML    SORUML     SORUML
                                                      ULUK                ULUK      ULUK       ULUK
 Collaboration with
                                                                ULUK
                                                     BÖLGELE   BÖLGELE   BÖLGELE   BÖLGELE    BÖLGELE
                                                        Rİ        Rİ        Rİ        Rİ         Rİ
 reinsurers


        TCIP
EMERGENCY CALL CENTER




                                                                                                    TO INCREASE
                        TO INCREASE
                                                  TO IMPROVE              TO IMPROVE               COORDINATION
                         MODELLING
                                                   DATABASE              UNDERWRITING              W/ INSURANCE
                          CAPACITY
                                                                                                     INDUSTRY
REINSURANCE

Reinsurance Program 2010-2011
      1.550.000.000 € R/I protection
      200.000.000 € priority
      “A” rated panel of Reinsurers
      One of the biggest R/I Program in
      the world
      R/I capacity based on 1/200 year
      event




Modelling
      RMS
      EQE Cat
      AIR
      Inhouse
WORKING WITH LLOYD’S

 65 Reinsurers
 19 Lloyd’s syndicates
   • Amlin (AML 2001)
   • Limit (STN 566)
   • Sagicor (SAL 1206)
   • Ark (ARK 4020)
   • Broadgate (BGT 1301)
   • Beazley (AFB 623)
   • Antares (AUL 1274)
   • Advent (ADV 780)
   • Catlin (SJC 2003)
   • Hardy (HDU 382)
   • Aegis (AES 1225)
   • Canopius (CNP 4444)
   • Cathedral (MMX 2010)
   • Barbican (BAR 1955)
   • Chaucer (on behalf of CSL 1084) written      A total of Lloyd's capacity amounting
   • Liberty Syndicates (on behalf of LIB 4472)   to 179 million Euro is used for TCIP
   • Brit                                         (through reinsurance markets listed
   • Houston Casualty Company                     hereabove) and more capacity is
                                                  expected to be placed for the
                                                  following terms.
CHALLENGES



             STRATEGIC                            OPERATIONAL


   Low insurance awareness                Increasing number of policies
   Low penetration rate                   Excelling in Cat Event Claim
                                          Management
   Not having Parliament Law
                                          Establishing strong synergy between
   Restructuring of TCIP after a decade
                                          institutions
   Aligning with national databases
                                               Public offices
   Increasing control level in public
                                               Insurance companies,
   offices
                                               intermediaries
                                               Claim adjusters
                                          Increasing Reinsurance capacity
                                          Using alternative claim financing
                                          tools
                                          Implementation of new projects
PARTICIPANTS

  H.OKAN UTKUERI - President
  H. Okan Utkueri joined Eureko Sigorta on 15th March 2006 as Executive Vice President. He
  was appointed as CEO on 1st September 2006. He has a BS degree in Food Engineering
  from Middle East Technical University (1990), and an MA from the Institute of Banking and
  Insurance of Marmara University.


  ISMET GUNGOR - Executive Vice President
  İsmet Güngör graduated from Istanbul Technical University Maritime Faculty, and received
  his M.B.A degree in Finance and Insurance in USA. He joined Eureko Sigorta on 15.01.2007
  as Executive Vice President and he is currently responsible for DASK and Agency&Broker
  Unit.

  SUHA ÇELE - Group Director
  Suha Çele joined Eureko Sigorta in 1998 as a reinsurance specialist. He has BA & MA
  degrees in Business Administration from Bogazici University, Anadolu University and
  İstanbul University respectively. He is currently acting as Group Director responsible for
  Non-Motor Underwriting, Non-Motor Claims and Reinsurance. He also manages reinsurance
  operations of TCIP
                                 TURKISH
                             CATASTROPHE
                          INSURANCE POOL
                                    (TCIP)




        LLOYDS
MARKET DEVELOPMENT TRIP
        TURKEY               May 2010, ISTANBUL
 WEDNESDAY 6 JULY 2011

				
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posted:7/21/2011
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