Turkiye: Senior industry executive expects motor pricing to be liberalised
The problem of insufficient premiums in compulsory motor third-party liability insurance (known as traffic insurance) imposes a great burden on the sector, with many insurers suffering technical losses in the branch, according to Mr Ceyhan Hancioglu, general manager of Magdeburger Sigorta.
“The shift to free tariffs will be a serious step towards alleviating this burden,” reported Sigorta Medya, quoting Mr Hancioglu.
He added, “We know that the Insurance and Private Pension Regulation and Supervision Agency (SEDDK) is also willing to transition to free tariffs. For this reason, we believe that there will be free pricing in traffic insurance in the future.”
Meanwhile, a new pricing system will be implemented with effect from 1 May.
Before May, insurance companies are allowed to increase traffic insurance premiums by up to 4.75% every month over the previous month.
In May, there will be a one-off 5% increase in the tariff and the month-on-month rate of increase will be cut to 2%. That is, in May, motor insurance tariffs will rise by 7% (one-off 5% and a month-on-month increase of 2%). Starting from June, the month-on-month increase will be 2%.
In August 2023, a change was made in the pricing system, providing for tariff differentiation between privately owned and commercial vehicles. Under this, the owner of a vehicle registered to a company or business will pay a higher premium for traffic insurance compared to cars which are registered in an individual’s name. In the latter case, no increase is levied. This practice will continue after April 2024.
The pricing system also provides separately for higher premiums for vehicle owners who have been involved in traffic accidents and discounts for those with clean traffic records.
