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May 26, 2015Istanbul
ABOUT DASKCLAIMS & CAT MANAGEMENTREINSURANCE
HISTORY
The devastating Earthquakes in Marmara region on 17th August and 12th November 1999
Insured loss: around USD 800 milion
Economic loss: over USD 10 billion
Low insurance penetration (especially for residential risks)
Burden on public budget
Decree law no 587 – compulsory earthquake insurance as of 27th September 2000 untill 18th of August 2012
As from 18th August 2012 new 6305 Catastrophe Insurance Law
PRE-TCIP
WHY
Reactive solutions versus proactive solutionsShortage of funds in immediate needAllowance of funds to those in need is problematicPolitical and bureaucratic considerations may prevail Government priorities is on getting back to economic and social life
GOVERNMENT’S PRIORITIES
A compulsory earthquake insurance system for homeownersAffordable price for every homeownerTrue risk transfer mechanismClaims-paying capacity to limit government’s exposureBuild national catastrophes reserves by timeimprovement of risk culture and insurance consciousness in publicRely on distribution channels of Turkish insurance industry
ESTABLISMENT OF DASK
LEGAL AND FINANCIAL BASE OF DASK
Financed by Marmara Earthquake Emergency Reconstruction Project co-financed by
Turkish GovernmentWorld BankEuropean Bank for Reconstruction and Development
Decree law no 587 – compulsory earthquake insurance as of 27th September 2000. Eureko Sigorta is tendered for the following 5 years till August, 2020As from 18th August 2012 new 6305 Catastrophe Insurance Law
PUBLIC-PRIVATE PARTNERSHIP
NOWHEREWITHOUT
TECHNOLOGY
WAN
J2EE APPLICATION
SERVER
J2EE APPLICATION
SERVER
ORACLE DATABASE
LDAP
J2EE APPLICATION
SERVER
LDAP
ORACLE DATABASE
DMZWEB SERVER
FIREWALL
DMZWEB SERVER
FIREWALLDISASTER RECOVER CENTER
TCIP
CENTER
CALL CENTERCOMPANIES
L LINE
INTERNETİSTANBUL ANKARA
16 MILLIONHOMEOWNERS
THE TREASURYGENERAL DIRECTORATE OF
INSURANCE TCIPBOARD OF DIRECTORS
INSURANCE COMPANIES
REINSURANCE
IT
FUND MANAGMENT
AGENCIES BROKERSBANC
ASSURANCEDIRECT & ADC
CONTRACTUALAGREEMENT
PR
CLAIM OPERATIONS
CLAIM
MANAGEMENT COMPANY
• State of the art technology• 99,9% service level• Investing into satellite and mobile
technologies• Continuous improvement• Various level Back-up services, data and
programs• Disaster Recovery Center is able to be in full
operation within 2 hours
BASICS OF DASKPUBLIC AND
PRIVATE PARTNERSHIP
30.000 POS
SINGULARITY AND SIMPLICITY
PROPERTY
EARTHQUAKE
RESIDENTIAL BUILDINGS
DASK
SINGLE
LINE
PERIL
RISK
PROVIDER
ONLY EARTHQUAKE
ALL BANKS AND AGENCIES
3 PRICING FACTORS
FEW INFORMATION
SIMPLE
TO UNDERSTAND
TO ACCESS
PRICING
CLICK PRODUCT
JUST CALL 125CLICK POST-SALES OPT
PRODUCT CONCEPT - SINGULARITY
PRODUCT FEATURES - SIMPLICITY
SCOPE OF COVER AND TARIFFICATION
TYPE OF CONSTRUCTION
Zone1
Zone2
Zone3
Zone4
Zone5
Steel, RC 2.20 1.55 0.83 0.55 0.44
Masonary 3.85 2.75 1.43 0.60 0.50
Others 5.50 3.53 1.76 0.78 0.58
TYPE OF CONSTRUCTION
UNIT ONSTRUCTION COST PER M²
Steel, RC 700 TL
Masonary 500 TL
Others 260 TL
TYPE OF CONSTRUCTİON
SUM INSUREDTURKİSH LİRA
Zone1
Zone2
Zone3
Zone4
Zone5
Steel or R/C 70.000 164 119 68 49 41
Masonary 50.000 203 148 82 40 35
Others 26.000 153 102 56 30 25
Prices for a 100 square meter dwelling (TL)
SIMPLE TARIFF
• Earthquake Zone• Construction Type• M² of apartment
SCOPE OF COVER
Only Earthquake and following•Fires •Explosions•Landslides•Tsunami
INSURABLE PROPERTY
Only Building• No contents• No BI
IMPROVED PENETRATION
FROM
4% TO 40%
SUSTAINED LOW PRICES
LESS THAN
€ 40ANNUAL PREMIUM
12 MİLYAR TLÖDEME KAPASİESİ
ACHIEVEMENTS
INCREASED PUBLIC AWAIRNESS
OVER
90%BRAND AND PRODUCTRECOGNITION
RELEASE ONNATIONAL BUDGET
€ 4.4 BILLIONCLAIM PAYMENT CAPACITY
LOW OPERATIONAL COST
LESS THAN
3%
EFFECTIVE PUBLIC-PRIVATE PARTNERHIP
HAS BECOMEA GLOBALROLE MODEL
OVERALL 40%
50%31%
29%39%36%
938,457
34% 26%
763,075AVERAGE PREMIUM - US$
POLICIES
DASK - TURKISH NATURAL CATASTROPHE INSURANCE POOL www. dask.gov.tr
$39 $33252,467
$55$221,308,985
$52222,467
$492,999,067
$39525,038
$ 427,0 mio
VARYING REGIONAL PENETRATION / LOW COST ACROSS THE COUNTRY
DASK IN THE FUTURE
HAVING ROBUST PLATFORM
DEVELOPING CONTINGENCY
RESOURCES
IMPROVING COORDINATION
USE OF HIGH END TECHNOLOGY
7.5 MILLION POLICIESIN 2015
10 MILLION POLICIES2017
EFFECTIIVE USE OF CHECK POINTS USE OF IMPROVED METHODOLOGIES AND RISK REDUCTION STUDEIS
STRONG COORDINATION WITH STAKE HOLDERS AND CONTINOUS PUBLIC RELATION ACTIVITIES
INCREASING PENETRATION IMPROVING CAT MANAGEMENT
ABOUT DASK CLAIMS & CAT MANAGEMENTREINSURANCE
LESSONS
Operational capacity is as important as financial capacity
Outdated operational manuals Procedures must be simple and lean Application of sum insured or indemnity limits Necessity for collaboration between;
Industries companies and public offices cities-countries
Lack of; adjusting capacity technology Field knowledge
LESSONS
Less loss of lives in the countries with stringent building codes (Chile and New Zealand)
Multiple events are not unusual (1999 Turkey and 2011 New Zealand)
Secondary risk causing severe damages (tsunami, liquefaction, nuclear damage)
Modeling has it’s limitation Underestimated scenarios
Economic Political Demographic
Ambiguity on expectations from insurance industry
Importance of strong construction industry Need for more involvement of Government
support
NEW ERA IN CAT MANAGEMENT
o 12.01.10 7.0 Haiti Earthquake
o 27.02.10 8.8 Chile Earthquake
o 04.09.10 7.1 New Zealand
Earthquake
o 11.01.11 Australian Flood
o 11.03.11 8.9 Japan Earthquake
o 22.02.11 6.3 New Zealand
Earthquake
OPERATIONAL CAPACITY
AS IMPORTANT AS FINANCIALo 23.09.2011 Van Earthquake
o 09.11.2011 Van Earthquake
o 2012 Kütahya Earthquake
JAPAN MODEL NEW ZELAND MODEL
DASK’S STRATEGY FOR THE FUTURE
EXPERIENCE GAINED IN TURKISH EARTHQUAKES
LESSONS
When to start claim adjusting; after rescue operations or aftershocks
How important to have continuous observation on damage development of on the field because of after shocks
Appointing adjusters to the building not to the policies How important to have standard, simple and transparent
adjustment To have fixed construction cost tables for claim adjusters Adjustment of common areas of the buildings Difficulties in logistics and housing of the claim adjusters Claim adjusters reluctance on leaving in the earthquake
area. Public offices, such as Municipality and Land Register
Offices, being un-operational due to physical damage or loss of lives Unavailability of construction capacity in the region
Public confusion on claim adjustment due to Government’s damage assessment activities.
Public prosecutors and mortgage holders' discretion on the claim payments.
Low sum insured on the policies Physiological trauma causing people to leaving the city, Confusion on address information Lack of engineering knowledge of the professional claim
adjusters Lack of coordination with insurance companies
VAN EARTHQUAKE
TOTAL NUMBER OF CLAIM NOTIFICATION 8.701
TOTAL PAID CLAIMS 7.000
TOTAL PAID AMOUNT 123.000.000
JUSTIFIYING TCIP’S SUM INSURED
TOTAL NUMBER OF TOTAL LOSSES 1.289
TOTAL PAID 75.639.234
TOTAL SUM INSURED 99.043.410
DIFFERENCE 24%
%24 EXACTLY SAME FOR SIMAV EQ
SOCIAL OBJECTIVES
INSURANCE PRINCIPLES
CAT MANAGEMENT PLATFORM
Uydu Görüntüleme ve Fark Algılama
İB1_
DA
SK
İnt
erak
tifİB
2_O
pera
syon
el
Ver
imlil
ikİB
4_H
asar
Yön
etiş
im
2. Ç 3. Ç 4. Ç 5. Ç 6. ÇİB Proje 1. Ç
P1
P2
P3
P4
P5
P6
İB3_
Etk
in H
azır
lık P7
P8
P9
P10
P11
P12
İTÜOnay
BirimMaliyetlendirme
İzmirTasarım Algoritma
HasarKategorizasyon
TOBB Eksperleri Bilgi Dosyası Yeni Eksper Bilgi DosyasıÇŞB, AFAD, Üniversiteler ve Mühendislik Odaları ile
Görüşmeler
Eğitim İçerik Yönetimi ve Organizasyonu
Konsolide Veri Modeli İş Kuralları ve Kontoller
Saha LojistikAlternatifli Aksiyon Planlaması
Saha Organizasyon Modellemesi
Banka / PTT ile MutabakatÖdeme Uygulaması
IVR
Sigortalı ve Aday Sigortalı Mobil Uygulaması
Sigortalı Portalı
Modelleme (BOUN)
Hava ve Sokak Görüntüsü
Mobil Eksper Uygulaması
Analitik Kapsamı ve Analizi
Nakit Akış Planlaması
Hasar Uygulaması **
2014* 2015*
Program Planlamasıve Mobilizasyonu
Proje ekiplerine bilgi aktarım ve kapsam detaylandırma workshop’ları
Program Yönetimi; Değişim ve İletişim Yönetimi
Veri Ambarı Senkromizasyonu ve Optimizasyonu (Tasarımların tamamlanmasını takiben)
Veri Modelleme, BT Altyapı ve Mimari Değerlendirme Workshopları (Program boyunca)
Öncelikli Veri Temizliği
AFAD, ÇŞB ile ortak kaynak kullanımı ve/veya ortak eğitim kapsamının ve planının oluşturulması
Eğitim StratejisiEğitim Sertifikasyonu
Geocode
Eğitim İçerik Güncellemeleri
Hasar KPI ve SLA’ler
Eksper KPIve SLA’ler Hasar
DashboardEksper
Dashboard
Haritalandırma ve Etki Tahminleme Poliçe Entegrasyonu
Hasar Kategorizasyon Modülü Güncellemesi
Hızlandırılmış Başlangıç
P13
Eksper Dashboard Güncellemesi
Üst Yönetim Raporlama
,U
Rap
orla
ma
ve D
ataW
areh
ouse
Dış Entegrasyonlar
E-Posta
Posta
Çağrı Merkezi
IVR
Web Portal
Mobil
Telefon / Fax
İhbarDosya
DeğerlendirmeRücu/Sovtaj
Dosya NotlarıHasar
Kontakları
Şablonlar
SuistimalPatternler Ödemeler Tahsilatlar
LimitMuafiyet
Muallak Yönetimi
Eksper & PerformansYönetimi
E-posta / SMS Görevler Raporlama KonfigurasyonHasar Destek Fonksiyonları
Hasar Yönetimi Finansallar
Hasar Uygulamasıİletişim Kanalları
Çıktı
Poliçe Sistemi
Ödeme SistemiReassürans
Sistemi
Risk YönetimiSkorlama Sistemi
İç EntegrasyonlarMaliyetlendirme
SistemiModelleme ve Tahminleme
UygulamasıPoliçe Sistemi
Ödeme Sistemi
Analitik ve Veri Madenciliği
Muhasebe Sistemi
Risk YönetimiSkorlama Sistemi
Döküman YönetimiArşivleme
İş Süreç/AkışYönetimi
Olay Tanımlama
Coğrafi Bilgi Sistemleri
Dönüşümler ve Haritama
Modelleme ve Tahminleme UygulamasıMaliyetlendirme Sistemi
MaliyetlendirmeStandardizasyonu
MaliyetlendirmeKategorizasyonu
Analitik ve Veri Madenciliği
Performans ÖlçütleriVeri Madenciliği
Muhasebe SistemiÖdeme Sistemi Reasürans Sistemi
Hasar Uygulamasını Destekleyen Uygulamalar ve Kurumsal Uygulamalar
Web Satış(Vizyoneks)
TAPUElektrik Su
DairesiUAVT
Sigorta ŞirketleriAcenteler
E-DevletPortföy Yönetim
ŞirketleriTOBB
BankaPTT
TAPUAFADCBS
VEDOP UYAPKandilliSistemi
Eksper Yönetimi
• DASK designed the cat management structure with improved procedures and new model
• Accenture’s study justified the target model and provided implementation plan.
• DASK preferred to built it’s model on the renown platform, SAP
• Local partner, Vizyoneks, is integrating and developing the application together with SAP
• IBM is the program manager and business modeller on behalf of DASK
DASK CLAIM ADJSUTMENT PRINCIPALS
BEFORE EARTHQUAKE
IMMEDIATELY AFTER EARTHQUAKE
SHORTLY AFTER EARTHQUAKE
EARTHQUAKE OPERATION
EXCEL ON MODELLING
EXCEL ON ESTIMATION
EXCEL ON DESKTOP LOSS ASSESMENT
EXCEL ON CLAIM ADJUSTMENT
T -1
T 0
T 1
T 2
WHY AND HOW TO INTEGRATE GIS TECHNOLOGIES
AFTERSHOCKS EXCEL ON TRACKING THE FIELDT
3
ABOUT DASKCLAIMS & CAT MANAGEMENT REINSURANCE
DESIGNING CLAIM PAYMENT CAPACITY
Diversify the Market More capacity from financial markets (credit lines,
bonds etc) Diversify the Tools
Alternative solutions (cat bond, structured deals, swaps etc)
Diversify the Regions Spread through all regions
Diversify the Currency Policy, construction industry, reinsurance program
Diversify the Payback conditions Ensure solvency of the system
CAT FINANCE
310
RISK ASSESMENT Increased risk perception causing higher loss estimates Ever increasing claim protection needs Increased sensivity on removing burden on national
budget TCIP’s leading role in Turkish Insurance market
CLAIM PROTECTION NEEDS Rapid growth in number of policies Accumulation sensivity in Istanbul Region Currency fluctuations Global Trends Vendor Modeling assumptions Comfort zone of TCIP Solvency II Rating Agency criteria's
MAINTAINVERTICAL AND HORIZONTAL
CAPACITY
OBTAIN AND MAINTAIN
TREASURY’S SUPPORT
MORE USE OF FINANCIAL
INSTRUMENTS
PROTECTION CAPACITY
PERMITTED INVESTMENTS YIELD
+ INTEREST SPREAD OREXTENTION PERIOD
PERMITTED INVESTMENTS
YIELD
SERIES 2013-1
CLASS ANOTEHOLDE
RS
BOSPHORUS 1 RE LTD
TCIP
U.S TREASURY MONEY MARKET
FUNDS OR CASH
PREMIUM PAYMENT DEPOSIT ACCOUNT
MEAG BOSPHORUS
REIN
SURA
NCE
AG
REEM
ENT
PREM
IUM
PAY
MEN
TS
AND
AD
DIT
ION
AL
PREM
IUM
ISSU
ERPA
YMEN
TS
400 MIO PROCEE
DS
INITIAL PERMITTED INVESTMENTS
400 MIO PROCEEDS
REPAYMENT AMOUNT
FUNDED INITIALLY WITH 190 DAYS OFINTEREST SPREAD AMOUNT CALCULATED
ON THE ORIGINAL PRINCIPAL AMOUNT
SECURITY INTEREST
CLASS ACOLLATERAL
ACCOUNT
• Rapid growth pushes TCIP to buy additional capacity• Great interest for diversifiers• High capacity demand is prone to surcharge in reinsurance premium• Cat Country Traditional Capacity available in the market is exhausting• TCIP takes higher portion of the reinsurance capacity in the market• Local insurance companies are getting difficulty in raising capacity• Earthquake exposure leaves not much capacity for other natural perils
450 MIO EURO
335 MIO EUROCAT BOND
3,15 BILLION EURO
3.250 BILLION EURO
%10
TRE
ASU
RY S
UPP
ORT
• Keep on investing into operational excellence• Continue to implement diversification strategy• Lead and support Turkish Insurance Market • Decrease cost of claim financing• Concentrate on building strong reserve funds • Abiding cat bond issuer• Maintain government support • Respect strategic partnership
• High quality of information/data for Investors• Transparent• Reliable• On-line• Unprocessed/row data from field
• Sponsored by TCIP• Established and operated by Kandilli Observatory• Availability of Historical data • Not only data but also availability of tools for calculation• Independent maintenance
EXAMPLE OF CALCULATION LOCATIONS’ IERREWS GROUND MOTION DATA
STATE OF THE ART TECHNOLOGY IN FINANCIAL INSTUREMENT AND THE FUTURE
KARADENIZ EARTHQUAKE, ML 4.5 PEAK GROUND ACCELERATION AT THE CALCULATION LOCATIONS
FINANCIAL PRODUCT BLENDED
WITH TECHNOLOGY
EX-ANTE CLAIM FINANCING EX-POST CLAIM FINANCING
CAT BONDS
CONTINGENCY CREDIT
TRADITIONAL REINSURANCE
ALTERNATIVE REINSURANCE
CORPORATE BONDS
RESERVE FUNDS
GOVERNMNET SUPPORT
EARTHQUAKE
PREMIUM BONDS
SWAPS
T-0
CLAIM FINANCING IN THE FUTURE