Turkey: Addressing private risks – the Turkey Catastrophe Insurance Pool (TCIP)

The TCIP is an insurance pool which seeks to provide affordable insurance to homeowners, especially those in urban residential areas, and to reduce the fiscal exposure of the Turkish government by accumulating funds for future disasters, sharing portions of risk within the country, and transferring other portions of the risk to international reinsurance and capital markets. The scheme is modelled on the California Earthquake Authority and the New Zealand Earthquake Commission, although adapted to local circumstances. Proof of participation in the scheme is compulsory for land registry transactions such as when houses are sold; however additional intended sanctions and incentives have not yet been implemented (in part due to the enabling law’s status as a decree law rather than a parliamentary law which would have the possibility of sanctions for non-compliance).

The TCIP started offering policies in September 2000. At that time, the Turkish government also changed sections of its disaster law to remove the government’s commitment to provide post-disaster reconstruction assistance for housing lost to natural disasters, thus putting much of the responsibility back on homeowners.

The TCIP is managed as a private insurance company under the strategic guidance of the Turkish Treasury and with a major input from private sector insurance companies that distribute TCIP’s insurance policies. During the first 5 years of the pool’s operations, the World Bank also provided a contingent credit layer that would have provided financial resources to the TCIP to meet claims if needed. Marketing and distribution of policies has been facilitated by a state-of-the-art Internet-based information system that has produced significant cost efficiencies in underwriting new policies. The policies are sold by private insurance companies who are paid a standard commission.

As of July 2008, TCIP covered 2.8 million households, approximately 21% of the target market overall in Turkey and 31% in the Marmara region surrounding Istanbul. While efforts to keep costs low have made the insurance more affordable, uptake of policies in areas outside of Istanbul, Ankara, and the western coast has been hampered by lower awareness of risk and lower levels of household income.

TCIP website

Are you sure you want to delete this "resource"?
This item will be deleted immediately. You cannot undo this action.

Related Resources

01 Jul 2014
Natural catastrophe losses in 2013 were dominated by floods. Detailed analyses have shown that protective measures can drastically reduce losses. For example, the June 2013 floods in Germany and neighbouring countries proved to be considerably less d...
Tags: Report, Climate Change Adaptation, Risk Assessment, Risk Transfer and Disaster Management
23 Mar 2015
This report presents data about natural disasters impacts (human and economic) at world scale for the last 20 years. The analyses focus on trends and patterns of impacts and how these vary regarding the income level or the geographical location. Base...
Tags: Report, Climate Change Adaptation, Drought, Earthquake, Flood, Risk Assessment, Risk Transfer and Disaster Management, Tsunami
Guidance material
20 Oct 2013
The paper focuses on financing and institutional arrangements for dzud. It seeks to encourage a more coordinated, predictable, timely and targeted approach to dzud on the part of both the Government of Mongolia (GoM) and its development partners, bas...
Tags: Guidance material, Cold wave / dzud, Risk Transfer and Disaster Management, Supporting Sustainable Livelihoods