Earthquake Insurance in Turkey : History of the Turkish Catastrophe Insurance Pool
This publication, Earthquake insurance in Turkey, is an exposition of the dangers faced by Turkey as it is located in one of the most active earthquake (EQ) and volcanic regions in the world on the one hand, and, on the other hand, the efforts that...
| Main Authors: | , , , |
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| Language: | English en_US |
| Published: |
Washington, DC: World Bank
2012
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2006/01/7397686/earthquake-insurance-turkey-history-turkish-catastrophe-insurance-pool http://hdl.handle.net/10986/7142 |
| Summary: | This publication, Earthquake insurance
in Turkey, is an exposition of the dangers faced by Turkey
as it is located in one of the most active earthquake (EQ)
and volcanic regions in the world on the one hand, and, on
the other hand, the efforts that Turkey is making to
alleviate the social and fiscal disasters that are caused
when these calamities do strike. The persistent potential
for large-scale disasters has led to the establishment of
the Turkish Catastrophe Insurance Pool (TCIP) in 1999. The
main rationale for the creation of TCIP was a very low level
of catastrophe insurance penetration among households. The
authors stress that the four principal objectives of the
program are to (1) provide earthquake insurance coverage at
affordable but actuarially sound rates for all registered
urban dwellings, (2) limit the government's financial
exposure to natural disasters, (3) build long-term
catastrophe reserves to finance future earthquake losses,
and (4) encourage risk reduction and mitigation practices in
residential construction. The book points out that the
program has reduced significantly the government's
fiscal exposure to EQ risk. In five years, the TCIP
transformed itself from an unknown and controversial
government-sponsored program to one of the most trusted
brand names in the Turkish insurance industry. Moreover, it
has led the World Bank to rethink the roles of ex-ante risk
management relative to ex-post donor support. In this
context, the World Bank supported Turkey's earthquake
insurance program to establish and expand national
catastrophic risk management and risk transfer capabilities.
The authors conclude that the TCIP's success has
brought it worldwide recognition. Inspired by the
TCIP's example, more than a dozen countries, including
China, Colombia, Greece, India, the Islamic Republic of
Iran, Italy, the Philippines, Romania, and nine island
states of the Caribbean have begun technical and legislative
preparation of catastrophe insurance programs. |
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