Educating the public about the importance of insurance must be approach in a more integrated way, according to Mr Uger Gulen, president of the Insurance Association of Turkiye (TSB).
He was speaking about the challenges of increasing compulsory earthquake insurance (ZDS) coverage on the occasion of the 25th anniversary of the Izmit Earthquake which struck the Marmara Region on 17 August 1999.
According to a report in Insurance Gazette, Mr Gulen said that insurance education had not entered school curricula yet. The fact that the ZDS penetration rate across Turkiye remained at 60% showed that the insurance industry had a long way to go.
He added that in the aftermath of the 6 February 2023 Kahramanmaras earthquake, the insurance sector rallied together to make damage compensation payments quickly.
Insurers faced some difficulties because some businesses had under-reported the value of their assets to pay lower premiums. Mr Gulen said, “We saw once again how critical it is to not forget all these problems and to proceed by getting the right insurance at the right prices.”
Readiness for the next big quake
He said that the insurance sector is readying for the expected Marmara Earthquake that is forecast to cause heavy damage. Experts predict, based on modelling, that the probability of an earthquake with Magnitude-7 in the Sea of Marmara near Istanbul is 35–70% in the next 30 years.
Pointing out that reinsurers became wary in the wake of the 6 February earthquake, Mr Gulen added, “We believe that if holistic policies that will instil confidence in the reinsurance market are developed and policies are followed to shift the risks concentrated in the earthquake zone to different regions in our country, reinsurance capacity will cease to be a problem.”
The measures to be taken against the potential Marmara Earthquake, which became a topic of discussion for the whole of Turkiye after the Kahramanmaras Earthquake, were included in the country’s 12th Development Plan covering the period 2024-2028.
Urban transformation projects need to be accelerated, insurance awareness needs to be increased, structural reinforcement works need to be carried out and emergency plans need to be implemented effectively.
According to the TSB, the ZDS penetration rate is 64.30% in the Marmara Region, of which Istanbul is a vital part.
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Provinces
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Number of houses
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Number of insured houses
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ZDS coverage rate
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Istanbul
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4,153,000
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2,612,270
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62.90%
|
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Marmara Region
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6,840,000
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4,395,382
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64.30%
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The economic losses caused by the Kahramanmaras earthquake are estimated at $105bn, of which the insurance sector covered only 5%.