TURKISH AGRICULTURAL INSURANCE POOL

(TARSIM)

Contents

Overview of Turkish Agriculture

Agricultural Risk Management and Insurance System

Insurance Products and Loss Handling

Agricultural Insurance in Figures

Rural Population: 23 %

Number of Farmers: 2,2 Million

GDP of Agriculture: 8 % (62,5 Billion $)

Agricultural Export: 16 Billion $

Total Agricultural Area: 24 Million ha

Avg. Size of Farm: 6 ha

In terms of agricultural economy, TURKEY ranks 1st in Europe, and 7th in the World.

GTHB, 2013

OVERVIEW OF TURKISH AGRICULTURE

The Distribution of Agricultural Land

Field crops66%

Fallow land17%

Vegetables3,4%

Vineyards1,8%

Fruits8,2%

Olives3,6%

Total Agricultural Area: 24 Million ha.

TÜİK-2013

OVERVIEW OF TURKISH AGRICULTURE

TURKEY

The Rank of Some Crops in the World

StrawberriesPistachiosApplesChickpeasPepper

FAO-2012

QuinceApricotRaisinFigsHazelnutsCherries

LeeksWatermelonMelonCucumber

Number of Livestock

TUİK 2014

31,1

14,1

10,3

Sheep Cattle Goats

Million Head

AGRICULTURAL RISK MANAGEMENT

AND

INSURANCE SYSTEM IN TURKEY

MINIMIZING THE DAMAGES OF NATURAL CATASTROPHES IN AGRICULTURE

Government enacted;

2090 Law of ad-hoc payments to farmers suffered from natural disasters

5996 Law of Veterinary services, crop health, food and fodder

DIRECT PAYMENTS OF THE GOVERNMENT

The sources in the funds are limited and direct payments did not meet the farmers needs.

With these financial aids of the government

- The effect of natural catastrophes could not be mitigated

and

- Income stabilization in agriculture could not be achieved.

1957 : Private Agricultural Insurance

1957 : Crop-Hail Insurance

1960 : Cattle Insurance

1984 : Poultry Insurance

1990 : Aquaculture Insurance

2006 : State Supported Agricultural Insurance (PPP)

HISTORICAL DEVELOPMENT OF AGRICULTURAL INSURANCEIN TURKEY

AGRICULTURAL INSURANCE SYSTEM(TARSIM)

GOVERNMENT

INSURANCE SECTOR

AGRICULTURAL SECTOR

LEGAL FRAMEWORK

Agricultural Insurance Law (2005)

Regulation of Implementation of Agricultural Insurance (2006)

Regulation about Working Principles of the Agricultural Insurance Pool (2006)

Annual decisions of the Council of Ministers regarding Coverage and Subsidies

THE POOL SYSTEM

HOLISTIC STRUCTURE Business managed as a unique organization

STANDARDISATION Transparent and uniform terms and conditions

PRODUCTIVITY AND ECONOMIES OF SCALEPossibility to buy insurance with lower premium rates

HIGH ASSURANCEFarmers insurance needs are highly met by extending the coverage

SUSTAINABILITY

BASIC FEATURES OF THE SYSTEM

• Agricultural Insurance Pool

• Management Company

• Government Subsidy in Premium and Losses

• Voluntariness

• Farmers Registration System (FRS)

• Coverage

• Supervision

PRIVATE SECTOR

NGOGOVERNMENT

Union of Turkish Agricultural

Chambers (1)

Insurance Association of Turkey (1)

AGRICULTURAL

INSURANCE

POOL

Ministry of Food, Agriculture and

Livestock (2)

Undersecretariat of the Treasury (2)

Agricultural Insurance Pool Management Company (1)

CORPORATE STRUCTURE OF THE POOL

BASIC FEATURES OF THE SYSTEM

• Agricultural Insurance Pool

• Management Company

• Government Subsidy in Premium and Losses

• Voluntariness

• Farmers Registration System (FRS)

• Coverage

• Supervision

PRIVATE SECTOR

NGOGOVERNMENT

Union of Turkish Agricultural

Chambers (1)

Insurance Association of Turkey (1)

AGRICULTURAL

INSURANCE

POOL

Ministry of Food, Agriculture and

Livestock (2)

Undersecretariat of the Treasury (2)

Agricultural Insurance Pool Management Company (1)

CORPORATE STRUCTURE OF THE POOL

Implement the decisions taken by the Board of the Pool

Collect premiums and pay indemnities

Manage resources of the Pool for investment

Carry out all kinds of works and organizations

- Development of insurance product

- Underwriting procedures and principles

- Actuarial studies

- Risk inspections

- Loss handling

- Training of loss adjusters and sales channels

- Geographical Information System (GIS)

- Research & Development

- Data management

- Public relations and publicity campaigns

DUTIES OF MANAGEMENT COMPANY

BASIC FEATURES OF THE SYSTEM

• Agricultural Insurance Pool

• Management Company

• Government Subsidy in Premium and Losses

• Voluntariness

• Farmers Registration System (FRS)

• Coverage

• Supervision

Premiums

INSURANCECOMPANIES

FARMERS

Indemnifications

Premium Subsidy

Premiums

GOVERNMENT

REINSURANCE COMPANIES

Co-financing for losses

RISK TRANSFER MECHANISM AND GOVERNMENT SUBSIDY

Reinsurance

BASIC FEATURES OF THE SYSTEM

• Agricultural Insurance Pool

• Management Company

• Government Subsidy in Premium and Losses

• Voluntariness

• Farmers Registration System (FRS)

• Coverage

• Supervision

INSURANCE PRODUCTS

INSURANCE PRODUCTS

Beehives Insurance

Crop Insurance

Greenhouse Insurance

Cattle Insurance

Sheep and Goats Insurance

Aquaculture Insurance

Poultry Insurance

HISTORICAL DEVELOPMENT INSURANCE COVERAGES

2006• First policy in June in Crop Insurance

• Crop, Cattle, Greenhouse and Poultry Insurance

2007

• Frost cover for fruits

• Abortion

• Aquaculture Insurance

2008 • Vehicle Impact and EQ covers in Greenhouse Insurance

2009 • Snow and hail weight cover in Greenhouse Insurance

2010 • Flood cover in Crop and Greenhouse Insurance

2011

• Flowering period in Frost Cover

• Fattening cattle in Cattle Insurance

• Sheep & Goats Insurance

2013• Flowering period for hail, storm and flooding perils in fruits.

• Land Pools In Aquaculture Insurance

2014 • Beehives Insurance

2015

• Stem of cereal crops • Hail nets and cover systems • Cage and nets in aquaculture • Wild animal attack in beehives

INSURANCE PRODUCTS AND COVERAGE

Insurance Line Coverage Scope

Crop Insurance

• Hail (incl. quality)

• Storm

• Flood

• Fire, EQ

• Landslide

• Tornado

• Frost (for fruits only)

• Field crops

• Fruits

• Vegetables

• Cut flowers

• Seedlings

INSURANCE PRODUCTS AND COVERAGE

Insurance

LineCoverage Scope

Greenhouse

• Hail

• Storm

• Flood

• Fire, EQ

• Landslide

• Tornado• Vehicle impact• Snow and Hail Weight

• Crop• Plastic + Glass Cover• Construction• Technical Equipment

Insurance Line Coverage Scope

Cattle • Mortality• Abortion

• Dairy & Fattening Cattle, Buffalo

Sheep & Goats • Mortality • Sheep, Goats, Rams

Poultry • Mortality• Broiler, Hen, Chicken• Turkey• Ostrich

Aquaculture • Mortality• Sea bass, Sea bream,• Trout, Tuna

Beehives• Damage (Storm, Tornado, Fire, EQ, Flood, Wild Animal Attacks, Landslide, Vehicle impact, Transport)

• Hives

INSURANCE PRODUCTS AND COVERAGE

FRS / VIS

(*)

REGISTER

CONTROL

POLICY ISSUANCE WORKFLOW

FARMER

APPROVAL

INSURANCE

APPLICATION

POLICYINFORMATION

UPDATE

APPROVAL

AGENCY

(*) Farmers Registration System

Vet Information System

29

LOSS HANDLING

LOSS ADJUSTMENT ORGANIZATION

Bursa

Manisa

Ankara

Antalya

Adana

Malatya

Giresun

Number of Loss Adjusters

Crop Insurance 1.166

Livestock Insurance 990

Aquaculture Insurance 63

Total 2.219

Tekirdağ

FARMER LOSS

ADJUSTERS

ADJUSTMENT

CROP AND GREENHOUSE INSURANCE

LOSS PAYMENT(**)

HOW TO PAY LOSSES?

NOTICE OF CLAIM / ADJUSTMENT/ PAYMENT

WORKFLOW

INSURANCE

COMPANY

(AGENCY)

LOSS ADJUSTER’S

REPORT

NOTICE OF

CLAIM

(**) Loss payment will be made to the insured’s bank account.

32

NOTICE OF CLAIMPOLICY OWNER / INSURED

(Producer)

VETERINARY SURGEON

(Loss Adjustment)LOSS REPORT

LIVESTOCK INSURANCES

LOSS PAYMENT

HOW TO PAY LOSSES?

NOTICE OF CLAIM / ADJUSTMENT/ PAYMENT

WORKFLOW

33

AGRICULTURAL INSURANCE

IN FIGURES

NUMBER OF POLICY

12.330

218.938260.944

306.770

371.116

587.716

744.093

891.876

1.086.6121.106.667

%19%18

%21 %58

%27

%20

%22

2007 2008 2009 20102006 2011 2012 2013 2014 2015

As at 30.04.2015

PREMIUM (MILLION TL)

2007 2008 2009 20102006 2011 2012 2013 2014 2015

4

64

98120

185

441

499527

684 695

54%22%

54%

138%

13%

6%

30%

As at 30.04.2015

SUM INSURED (MILLION TL)

211

1.478

2.225

2.901

3.988

6.986

9.497

11.253

13.895

11.718

50%30%

37%

54%

28%

11%

7%

2007 2008 2009 20102006 2011 2012 2013 2014 2015

As at 30.04.2015

12.980

348.995

443.518

560.239

661.955

920.323

1.205.464

1.434.105

1.605.525 1.590.690

INSURED AREA (Ha.)

%27

%26

%18

%39

%31

%19

%12

2007 2008 2009 20102006 2011 2012 2013 2014 2015

As at 30.04.2015

Number of Cattle

Number of Sheep & Goats

NUMBER OF INSURED ANIMAL

6.489 54.499 71.955112.198

188.436

361.259420.160 403.978 435.896

148.517

68.565

336.636423.537

607.609

226.913

2007 2008 2009 20102006 2011 2012 2013 2014 2015

As at 30.04.2015

1.1181.456

2.489

3.622 3.456

6.431

14.244

16.25216.890

2.810

NUMBER OF CLAIMS FILES

2007 2008 2009 20102006 2011 2012 2013 2014 2015

As at 30.04.2015

PAID LOSS (MILLION TL)

0,87

41 40

89114

210

261

386

502

65

2007 2008 2009 20102006 2011 2012 2013 2014 2015

As at 30.04.2015

1.1181.456

2.489

3.622 3.456

6.431

14.244

16.25216.890

2.810

2007 2008 2009 20102006 2011 2012 2013 2014

NUMBER OF INSURED GREENHOUSE

2015

As at 30.04.2015

LOSS RATIOS (%)

Loss Ratio: (Paid & OS Loss) / Earned premium

As at 30.04.2015

75

88

45

8086

64

50

69

80

68

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Avrg

%27

%84

%24

%48

ÖDENEN TAZMİNAT (Bin TL)

1.380

1.243

62

1.857

158

388

0

200

400

600

800

1.000

1.200

1.400

1.600

1.800

2.000

2.200

2.400

2.600

2.800

3.000

3.200

3.400

2.623

2.404

2006-2014WIN – WIN (MILLION TL)

Premium Paid by Farmer

Government Premium

Subsidy

Occurred Losses (including LAE)

Operational Expenses (including RIE)

Agency Expenses

Unearned Premium

Thank you for your attention.

Yasal uyarı

©2015 TARSIM. Tüm hakları saklıdır.

Bu sunum üzerindeki her türlü fikri ve sınai mülkiyet hakları ile tüm telif hakları TARSİM'e aittir. Bu nedenle, bu sunum üzerinde herhangi bir

değişiklik yapılamaz, sunumun türevleri oluşturulamaz, çoğaltılamaz, TARSİM'in yazılı izni olmadan ve kaynak gösterilmeden, sunumun

bütünü veya bir kısmı, ticari veya diğer kamusal amaçlar için kullanılamaz. Kullanılan tüm bilgilerin, güvenilir kaynaklardan alınmasına

rağmen, TARSİM verilen detayların doğruluğu ya da kapsamından dolayı hiçbir şekilde sorumlu tutulamaz. Bu nedenle, sunumun doğruluğuna

ve tamlığına ilişkin veya sunumda yer alan bilgilerin kullanımından kaynaklanan herhangi bir zarara ilişkin sorumluluk kesinlikle kabul edilmez.

Hiçbir koşulda, TARSİM bu sunuma ilişkin herhangi bir mali ve / veya dolaylı kayıptan dolayı sorumlu tutulmayacaktır.

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