Although the number of insurers and brokers in the Turkish market has rightly been regulated by the state to ensure that only stable and solvent companies exist, with more than 100 brokers and more than 45 insurers, fierce competition exists in the insurance sector, according to Aret Tasciyan, a marine industry veteran, and currently chairman of Omur Group and head of Turk P&I Sigorta.
He noted that 30 years ago the local reinsurers were often acting more like agents for Lloyd's, and could not proceed further than just fronting policies. "The Turkish market is a relative newcomer compared to the London market". Private insurers were only established in Turkey in the 20th century and most of those in the 1980s. Before that English and French insurance companies, dating back to the early 20th and 19th centuries. Even today you can see fire marks on the old wooden buildings in Istanbul.
The new Turk P&I had been created in response to one such need in the Turkish market, he said. Turkey has a large number of small craft. Many of these had never had insurance, so the Turkish Minister for Transportation has brought together the local P&I correspondents, plus three state-owned insurance companies, to create Turk P&I, a venture backed 100% by Turkish capital, said Mr Tasciyan, who was sitting on a panel moderated by Joe Balls, chairman of the Omni Group.
. Mr Tasciyan said that, not only would the new insurer provide fixed income premiums with cover worth up to $500m. It would also ensure that smaller vessels would be checked regularly for safety.
Mr Tasciyan said that in hull & machinery (H&M) there had been overcapacity for some time, as there had been in most of the world. However, he insisted that it had not impacted the quality of product offered by underwriters.
Beginning in the 1980s there had been a huge growth in the number of insurers in the Turkish market, many of which have now been bought by European insurers that have offered new products in personal lines, industrial , health and so on, but not many Turkish insurers had shown an appetite for Hull & Machinery. And no wonder why when the international players who are able to write worldwide, still struggle to make an underwriting profit".
He noted that, unlike the P&I clubs, which can make calls on their members when they have a bad year, H&M and fixed premium insurers had no such luxury.
Mr Tasciyan said that it was clear that Lloyd's would like to expand in the Turkish sector, although he noted that marine only made up 8% of Lloyd's premiums in 2012.
Few Turkish insurers have been showing much enthusiasm for H&M, said Mr Tasciyan, but this was hardly surprising, given the revelation at last year's IUMI conference that H&M had made a loss for the last 17 years in a row.
He also observed, in response to a question from the floor relating to restrictions imposed on vessels as to where they could insure, that P&I was not restricted, and the restrictions imposed on H&M policies was not as draconian as it appeared.
Tasciyan said: "According to the Turkish Commercial Court, hull and machinery insurance has to be written by a Turkish insurance company. Only P&I has an exemption here. However, those vessels that are financed by foreign banks, or those ships that are under the Turkish international registry, can place their insurances abroad". SO, only a pure Turkish vessel owned by a Turkish shipowner and financed by a Turkish bank, has to place its H&M business with a Turkish insurer located in Turkey."
I can confidently say that the reaction of the marine insurance market in the face of changing conditions and legislation has always been very responsive".
"Today an increasing number of huge container ships has already begun to make life difficult for average adjusters and claims handlers".
Sectors where insurers had shown adaptability included General Average insurance, with standalone policies were now available, because policyholders were increasingly unwilling to take out policies that had General Average as part of the policy. "Maybe the days of General Average are numbered", he conceded. Marine insurers had also responded to Kidnap and Ransom, creating policies as the Somalian threat in creased, and paying out more than $300m between 2008 and 2012.
The marine insurance industry had also reacted well to problems created by drug trafficking, frequently without the knowledge of the ship captain or owner, said Mr Tasciyan. Policies had been created to compensate (innocent) owners for permanent confiscation and for loss of business as a result of temporary impoundment. Previously those losses had not been included in marine risk policies. |
Source : Reactionsnet.com
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