Sunday, 13 December 2015 22:25
Loss in Motor Third Party Liability Insurance Continue
Insurers has paid 39% of total claim payments to bodily injury claims which is creating 3% of total number of motor third party liability insurance claim files and again generated 567 million loss as of 2014 Q3.
The premium increase in non-life insurance since 2010 has reached TRY 21 billion with an average increase of 13% per year as of October 2014.
Despite of the increase in the previous years, in parallel with the weak economy, the premium production in Turkey slowdown in 2014.
On the other hand, especially the payments made to bodily injuries within compulsory motor insurance underlie the main cause of loss in the sector.
The following reasons cause serious losses to the insurance companies: it is a long tail product; the injured parties choose to search legal remedies through courts without coming to the insurance companies; decisions are taken by the courts in favor of the injured parties for damages not mentioned in the policies and the interest and other expenditures increase.
In case of the insufficiency of the reserves allocated for bodily injuries, the risk for the drifting of the insurance sector into a crisis similar with the banking crisis faced in 2001 and risk of serious irreparable damages to all shareholders of the sector increase every passing day.
