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UFUK UL - Economist , MBA in Business Administration - In insurance sector from 1993 - Motor Group Manager in HDI Si

UFUK UL - Economist , MBA in Business Administration - In insurance sector from 1993 - Motor Group Manager in HDI Sigorta. LAST 10 YEARS TRAFFIC ACCIDENT STATISTICS OF TURKEY % OF VEHICLE OWNERS INSURED BY AN MTPL (*) POLICY LAST 5 YEARS M TPL TECHNICAL RESULTS

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UFUK UL - Economist , MBA in Business Administration - In insurance sector from 1993 - Motor Group Manager in HDI Si

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  1. UFUK UL - Economist , MBA in Business Administration - Ininsurancesectorfrom 1993 - Motor Group Manager in HDI Sigorta

  2. LAST 10 YEARSTRAFFIC 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 ThirdPartyLiability.

  3. MAIN DIFFICULTIES IN BODILY INJURY CLAIMS • Rightfulparties of bodilyinjurysometimeslearntheirrightafteryears. Thatperiodcreatesdifficultiestocalculateultimatelossamount. • Some of rightfulpartiesdirectlygotothecourtwithoutapplyinginsurancecompanyforindemnity. Thisbrings a signicantincrease on indemnity. • Increasingnumber of lawyersandcompanieshavebeendealingwithbodilyinjuryclaims. Theyfindrightfulpartiesandpresent an offertofollowtheirclaimwith a fee. Theygoeithertheinsurancecompanydirectlyorthecourttogettheindemnity • Their is noonedefiniteactuarialway of calculation of bodilyinjuryindemnity. Court actuariesandotheractuaries can calculatedifferentindemnities. Forthisreason, a highpercentage of rightfulparties, whohavealreadygottheirindemnityfrominsurancecompanies, alsoapplyfor a courttogetadditionalindemnity. Theyaregenerallyleadedbytheabovementionedlawyersandcompanies. Soweneedonedefiniteandagreedway of actuarialindemnitycalculationforbodilydamages. • Excessivecompetition in the MTPL market preventedpriceincreasesin manyyears. Forthisreasoncompaniesweresubjectedtochronictechnicallosses . At last , market begantoreacttothisnegative trend as increasingtheir MTPL prices in thesecondhalf of 2012.

  4. INDEMNITY AMOUNT CHANGES IN BODILY INJURY CLAIMSCOURT CASES VS. DIRECT APPLICATIONS AN EXAMPLE : Inthisexample, wewillcomparedirectapplication of a bodilyclaimwith a courtapplication. A rightfulpartyappliedfor a bodilydamageto an insurancecompanyandgotTL 45.000 as an indemnity. Whatwouldhavebeentheindemnityif he had goneto a court ? When a courtcaseopens it brings legal expensessuch as lawyerfee, courtchargeetc. Alsointerestwill be calculatedfortheperiod. Moreoverifcourtdecidesaftertwoyears, newactuarialcalculation is done withthecurrent minimum wage (minimum wage is increasing 10 to 11 % yearly) Soaftertwoyearsindemnityamountbecomes TL 89,378, which is double of thefirstcalculatedfigure TL 45.000 Thereforedirectapplicationsbringsignificantlylesscosttoinsurancecompanies. Companiesshouldtrytofindsolutionsto legal applications.

  5. PRICING OF TOTAL MTPL AND ITSBODILY INJURY CLAIMS • MTPL pricingshoudbeginwith a correctreserving. IBNR + IBNER calculationsshould be addedtoclaims. • Alsoclaimsinflation of data studiedandfutureinflationexpectationsshould be considered • Multivariateanalysis of vehicletypesanddifferentsegments in themshoud be examinedanddecided. • Overaveragebodilyclaimcreatingsegmentsshould be pricedadequatelyandsecurely. Forexample : Worstbodilydamagecreatingcities of Turkeyhave 2,1 % of total policiesand6,1 % of bodilyclaims (as numbers) Thatkind of groupsshould be pricedaccordingly. • Duringpricingunexpectedfuturedevelopmentssecuritymarginshould be considered. Such as highcourtdecisions, legal authoritypracticechangesandotherunexpected developments.

  6. THANK YOU FOR LISTENING

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