UFUK UL
- Economist , MBA in Business Administration
- In insurance sector from 1993
- Motor Group Manager in HDI Sigorta
IN THIS PREZENTATION :
-
LAST 10 YEARS TRAFFIC ACCIDENT STATISTICS OF TURKEY
-
% OF VEHICLE OWNERS INSURED BY AN MTPL (*) POLICY
-
LAST 5 YEARS MTPL TECHNICAL RESULTS
-
BODILY AND MATERIAL MTPL CLAIMS DEVELOPMENT OF TURKISH MARKET
-
MAIN DIFFICULTIES IN BODILY INJURY CLAIMS
-
AVERAGE MTPL PREMIUM (TL) DEVELOPMENT OF MARKET
-
INDEMNITY AMOUNT CHANGES IN BODILY INJURY CLAIMS ; COURT CASES VS. DIRECT APPLICATIONS
-
PRICING OF TOTAL MTPL AND ITS BODILY INJURY CLAIMS
(*) MTPL = Motor Third Party Liability.
LAST 10 YEARS
TRAFFIC ACCIDENT STATISTICS OF TURKEY (*)
No of
No of
No of
Vehicles
Accidents
Deaths
2003
8.903.843
455.637
3.959
117.551
2004
10.236.357
537.352
4.427
136.437
2005
11.145.826
620.789
4.505
154.086
2006
12.227.393
728.755
4.633
169.080
2007
13.022.945
825.561
5.007
189.057
2008
13.765.395
950.120
4.236
184.468
2009
14.316.700
1.053.346
4.324
201.380
2010
15.095.603
1.104.388
4.045
211.496
2011
16.089.528
1.228.928
3.835
238.074
2012
17.033.413
1.296.636
3.750
268.102
Years
(*) This report includes accident site statistics
No of Injuries
ROAD ACCIDENTS FREQUENCY
9.0%
6.9%
6.0%
5.1%
5.2%
2003
2004
5.6%
6.0%
7.4%
7.3%
2009
2010
7.6%
7.6%
2011
2012
6.3%
3.0%
0.0%
2005
2006
2007
2008
NO OF DEATHS PER 1000 ACCIDENT
(IN ACCIDENT SITE)
10.00
9.00
8.69
8.24
8.00
7.26
7.00
6.36
6.06
6.00
4.46
5.00
4.11
4.00
3.66
3.12
2.89
2011
2012
3.00
2.00
1.00
-
2003
2004
2005
2006
2007
2008
2009
2010
NO OF INJURIES PER 1000 ACCIDENT
(IN ACCIDENT SITE)
300
258
254
250
248
232
229
207
200
194
191
192
194
2008
2009
2010
2011
150
2003
2004
2005
2006
2007
2012
% DISTRIBUTION OF ACCIDENT RESULTS
(2012 ACCIDENTS)
0.24%
11.61%
% OF DEADLY ACCIDENTS
% OF INJURY ACCIDENTS
% OF MATERIAL ACCIDENTS
88.16%
% OF VEHICLE OWNERS INSURED BY AN MTPL POLICY
(2012 DECEMBER EVALUATION)
22.8%
INSURED
UNINSURED
77.2%
UNINSURANCE (%) :
CARS
PICKUP TRUCK
TRACTOR
MOTORCYCLES
8%
12%
58%
64%
LAST 5 YEARS
MTPL TECHNICAL RESULTS :
(Mio TL)
Premium
(Mio TL)
2008
2009
2010
2011
2012 (End of Sep.)
1.815
1.703
2.306
2.700
2.521
Technical Profit Technical Profit
(Mio TL)
(%)
-467
-296
-587
-462
-652
-26%
-17%
-25%
-17%
-26%
Loss ratio
(%)
110%
92%
105%
92%
108%
LAST 3 YEARS
MTPL CLAIMS DEVELOPMENT OF TURKISH MARKET (*)
MATERIAL CLAIMS :
YEARS
2010
2011
2012
POLICY NUMBERS
11.745.633
12.942.474
13.862.901
NO OF CLAIMS FREQUENCY
951.231
8,10%
1.130.983
8,74%
1.225.873
8,84%
BODILY INJURY CLAIMS (**) :
YEARS
2010
2011
2012
POLICY NUMBERS
11.745.633
12.942.474
13.862.901
NO OF CLAIMS FREQUENCY
15.670
0,13%
34.965
0,27%
29.657
0,21%
AV. CLAIMS
INCURRED
20.071
15.612
34.390
AV. CLAIMS PAID
18.715
13.123
23.034
(*) SOURCE : INSURANCE ASSOCIATION OF TURKEY
(**) BODILY INJURY CLAIMS INCLUDE ONLY DEATH AND PERMANENT DISABILITY CLAIMS.
BECAUSE CURRENTLY ; 10 % OF MTPL PREMIUM IS CEDED TO SOCIAL SECURITY INSTITUTION FOR
TREATMENT RESPONSIBILITY
MAIN DIFFICULTIES
IN BODILY INJURY CLAIMS
•
Rightful parties of bodily injury sometimes learn their right after years. That period creates difficulties to
calculate ultimate loss amount.
•
Some of rightful parties directly go to the court without applying insurance company for indemnity. This
brings a signicant increase on indemnity.
•
Increasing number of lawyers and companies have been dealing with bodily injury claims. They find
rightful parties and present an offer to follow their claim with a fee. They go either the insurance company
directly or the court to get the indemnity
•
Their is no one definite actuarial way of calculation of bodily injury indemnity. Court actuaries and other
actuaries can calculate different indemnities. For this reason, a high percentage of rightful parties, who
have already got their indemnity from insurance companies, also apply for a court to get additional
indemnity. They are generally leaded by the above mentioned lawyers and companies. So we need one
definite and agreed way of actuarial indemnity calculation for bodily damages.
•
Excessive competition in the MTPL market prevented price increases in many years. For this reason
companies were subjected to chronic technical losses . At last , market began to react to this negative
trend as increasing their MTPL prices in the second half of 2012.
AVERAGE MTPL PREMIUM (TL) DEVELOPMENT OF MARKET
FROM JANUARY 2011 TO JANUARY 2013
302
300
273
268
257
246
250
238
190
200
176
176 175
171 175 174
169
205 202 201 206
216 214
224
191
178 182 181
Jan.13
Dec.12
Nov.12
Oct.12
Sep.12
Aug12
July12
June12
May.12
Apr.12
Mar.12
Feb.12
Jan.12
Dec.11
Nov.11
Oct.11
Sep.11
Aug11
July11
June11
May.11
Apr.11
Mar.11
Feb.11
Jan.11
150
INDEMNITY AMOUNT CHANGES IN BODILY INJURY CLAIMS
COURT CASES VS. DIRECT APPLICATIONS
AN EXAMPLE :
In this example, we will compare direct application of a bodily claim with a court application.
A rightful party applied for a bodily damage to an insurance company and got TL 45.000 as an indemnity.
What would have been the indemnity if he had gone to a court ?
Indemnity amount
İntrest (from
15.11.2012)
legal expenses
Total Indemnity
Today
One year later Two years later
01.03.2013
01.03.2014
01.03.2015
45.000,00
49.869,00
55.264,00
1.176,16
5.791,64
11.391,95
17.950,34
20.260,28
22.722,91
64.126,50
75.920,92
89.378,86
When a court case opens it brings legal expenses such as lawyer fee, court charge etc. Also interest will be calculated
for the period. Moreover if court decides after two years, new actuarial calculation is done with the current minimum
wage (minimum wage is increasing 10 to 11 % yearly)
So after two years indemnity amount becomes TL 89,378, which is double of the first calculated figure TL 45.000
Therefore direct applications bring significantly less cost to insurance companies. Companies should try to find
solutions to legal applications.
PRICING OF TOTAL MTPL AND ITS
BODILY INJURY CLAIMS
•
MTPL pricing shoud begin with a correct reserving. IBNR + IBNER calculations should be added to claims.
•
Also claims inflation of data studied and future inflation expectations should be considered
•
Multivariate analysis of vehicle types and different segments in them shoud be examined and decided.
•
Over average bodily claim creating segments should be priced adequately and securely.
For example : Worst bodily damage creating cities of Turkey have
2,1 % of total policies and 6,1 % of bodily claims (as numbers)
That kind of groups should be priced accordingly.
•
During pricing unexpected future developments security margin should be considered.
Such as high court decisions, legal authority practice changes and other unexpected
developments.
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