preprints.org > business, economics and management > business and management > doi: 10.20944/preprints202305.1233.v1

Preprint Article Version 1 Preserved in Portico This version is not peer-reviewed

Version 1 : Received: 15 May 2023 / Approved: 17 May 2023 / Online: 17 May 2023 (10:37:32 CEST)

As in other parts of the world, natural disasters are increasingly causing significant loss of life and economic damage in Turkey. Natural disasters such as earthquakes, floods, storms, fires, and hailstorms have been occurring since ancient times, but now they are being compounded by factors such as climate change and the deterioration of natural environments. This has led to an increase in the frequency and severity of natural disasters and the resulting damage. It is important to finance the economic consequences of natural disasters that threaten individuals, commercial enterprises, and the country's administration. The frequency of the public's exposure to natural disasters, insurance awareness, the financial size of the disasters, the risk management policies of insurance companies, and the competence and willingness of the state and local governments to cover the damage are decisive factors. Prior to the increase in natural disasters, the country's administration was active and involved in first aid, rescue, and damage financing. However, it now has difficulty in financing the damage caused by natural disasters to individual, commercial, industrial, and agricultural assets and does not want to provide full assurance. This is because the dangers awaiting humanity in the future cannot be fully predicted. Private insurance companies undertake the task of taking over and distributing the risk in financing natural disaster losses and ensuring sustainability. Although this is a modern and rational solution, the problem is the insufficient number of insurance policies and insufficient premium production in countries where insurance awareness is not sufficiently developed. To increase premium production and geographical distribution of the risk, the state includes natural disaster insurances within the scope of compulsory insurances and mandates pre-disaster insurance policies. Following the earthquake disaster in the Marmara Region on 17.08.1999, compulsory insurance against earthquakes was introduced in Turkey with the Decree Law No. 587, which entered into force on 27.09.2000. This eliminated the obligation of the state to pay earthquake-related payments for the buildings determined by Turkish Natural Catastrophe Insurance Pool (TNCIP). Citizens have obtained modern, reliable, and regular insurance protection against earthquake damage. Naturally, the success or failure of Compulsory Earthquake Insurance (CEI) and Turkish Natural Catastrophe Insurance Pool (TNCIP) can be questioned after a major disaster. Since TNCIP is a new institution and other countries have not yet adopted it as an example, precedent institutions and past data cannot be included in the literature.

insurance; earthquake insurance; the compulsory earthquake insurance; insurance subsidy, vol-untary earthquake insurance; CEI; TNCIP

Business, Economics and Management, Business and Management

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