Türkiye: Turkish insurers are prepared to pay about TRY 16 billion for insured losses after the recent earthquakes, market authority says

23 February 2023 — Daniela GHETU

As of 20 February, the Turkish Catastrophe Insurance Pool (TCIP) has already paid claims worth about USD 27.6 million to policyholders whose homes were affected by the 6 February earthquakes. 

At the date, the number of residential property claims registered with TCIP was of 221,663, while the Pool expects the total number to amount at about 600 thousand. “The estimated number of files is 600 thousand. Therefore, the damage payments here will reach billions,” Mehmet Akif Eroğlu, Chairman of the Insurance and Private Pensions Regulation and Supervision Agency (SEDDK) stated for the local press. He added that “as the institution that regulates and supervises insurance in such a large and wide-ranging disaster, we have devoted our priority and focus to protecting the rights and interests of our policyholders, and we have completed all our work in this direction.” 

According to Eroğlu, besides the compensations paid for residential losses, Turkish insurers will have to pay also for damaged cars, loss of business, agricultural losses in the area, as well as for life and health insurance contracts.

  • According to the SEDDK head, out of the 3.15 million cars registered in the affected region, some 17% have Motor Hull insurance. Claims paid for motor insurance are expected to reach about TRY 1 billion.
  • On the corporate insurance side, payments made for business interruptions, loss of profit and physical damage are expected to amount to about TRY 12 billion.
  • In addition, compensation payments of about TRY 850 million are expected for life & accident insurance contracts, while payments to the heirs of victims under the private pensions system may also reach a significant amount.
  • As the earthquakes have affected also large agricultural areas, damaging crops and livestock, TARSIM – the agricultural insurance pool -, may have to pay claims worth up to TRY 70 = 80 million.

To ease insureds burden SEDDK took several measures, among which:

  • Automatically extending the maturities of all expired mandatory earthquake insurance policies during the state of emergency from February 6 to May 8 on the first day of the earthquake; SEDDK also postponed the collections related to these until 8 May
  • SEDDK has also removed the penalty for delay in compulsory MTPL insurance, mainly because the institution considered that many agencies in the region were not able to operate normaly. “In compulsory traffic insurance, we have implemented 6 installments, with the minimum first collection in May. Our aim here was to protect the rights and interests of the insured. We think that this puts our policyholders at ease,” Eroğlu explained.