TRAMER was established in 2004 with an eye to ensuring uniform implementation in Motor TPL Insurance and to handling a healthy pricing process. TRAMER collects insurance data in a central database and provides its users with data query and reporting service. Thanks to TRAMER, uninsured vehicle rate fell down to 23% from 31% and number of policies rose by 48% between 2003-2006 and average policy premium increased by 63%. Sector got rid of unfair price-based competition and a statistical infrastructure took shape for a more effective pricing. TRAMER is a successful example of government and private sector cooperation.

Policy Context

In Turkey, having about 10.000.000 insureds, MotorTPL Insurance has a share of 18% in non-life insurance branch. This market potential pushes insurance companies wishing to grow further to wage a harsh competition between themselves. And waging competition based on price rather than quality gives rise to harm to companies’ financial structure. This situation caused problems in indemnity payments and, thus, gave birth to sufferers both on the part of insureds and third parties harmed by traffic accident. Problems encountered in MotorTPL Insurances before establishment of TRAMER are: -High percentage of uninsured vehicles, -Incorrect application of the bonus/malus system, -No uniform claims history, -Unrecorded policies-fraud, -Organized fraud groups, -Unfair competition, -Non uniform data, -Drain on the Guaranty Fund, -Loss of tax revenue, -Bankruptcy of some insurance companies. On the other hand, economic crisis in 2000 had significant negative impact on insurance sector and, therefore, Undersecretariat of Treasury had to take a set of precautions. One of such precautions is the establishment of TRAMER. TRAMER was established within the structure of Turkish Insurance and Reinsurance Companies’ Association with an eye to providing MotorTPL Insurance with a healthier infrastructure. (SupportDoc.:Regulations.doc, OrgChart1.jpg, OrgChart2.jpg) Turkey started efforts to ensure harmonization with “e-Europe+” initiative as from 2001. “e-Turkey” and “e-Transformation Turkey” projects launched between 2001 and 2004 with an eye towards harmonization with e-Europe+ criteria are of milestone character for Turkey. Thanks to such projects, public sector has set a clear-cut strategy and concrete targets with respect to information technology efforts and ensured an interinstitutional coordination. The birth of TRAMER project coincided with such period, and TRAMER targets are in alignment with e-Turkey and e-Europe+ targets.

Description of target users and groups

TRAMER provides services on the basis of public sector to public sector, public sector to private sector and public sector to citizens. TRAMER provides services to the following segments: A-Public Institutions 1.Undersecretariat of Treasury of Prime Ministry (http://www.hazine.gov.tr, http://www.sigortacilik.gov.tr ) 3.General Department of Security (http://www.egm.gov.tr ) 4.Gendarme General Command (http://www.jandarma.tsk.mil.tr ) 5.Ministry of Health (http://www.saglik.gov.tr ) 6.Ministry of Transportation (http://www.ubak.gov.tr ) B-Insurance Sector 1.Turkish Insurance and Reinsurance Companies Association (http://www.tsrsb.org.tr ) 2.Highway Traffic Guarantee Insurance Account (http://www.ktgsh.org ) 3.Insurance Companies (24) (Detailed information about insurance companies, being member of TRAMER, can be accessed at the following address: http://www.tramer.org.tr/english/uyelerimiz.php ) 4.Authorized Agents and Brokers (15.000) 5.Insurance Experts (2.000) 6.Turkish Motor Vehicle Bureau (http://www.tmtb.org.tr ) C- Civil Society Organizations 1.Automotive Manufacturers Association (OSD) (http://www.osd.org.tr/index-english.htm) 2.Commercial Vehicle Importers Association (TAÄ°D) (http://www.taid.org.tr/) 3.Automobile Authorized Resellers Association 4.Automobile Distributors Association (ODD) (http://www.odd.org.tr) 5.Insurance Agents Association (SAB) (http://www.sab.org.tr/Eng/default_ENG.asp) 6.Turkish Insurance Agents Federation (TUSAF) D-Insureds and Citizens

Description of the way to implement the initiative

As TRAMER creates a bond between public sector and private sector, TRAMER executive committee members are designated as follows in such a way that related parties are represented in management. (SupportDoc.:OrgChart1.jpg,OrgChart2.jpg) -One member from Undersecreteriat Of Treasury General Directorate Of Insurance, -One member from General Department of Security of Ministry of the Interiors, -One member in representation of Turkisn Insurance and Reinsurance Companies’ Association, -One member out of technical managers of member insurance companies, -TRAMER Manager. TRAMER brought with it new business processes and technologies as regards insurance sector. Effetive change management handled in this process and participation of all related parties in project minimized difficulties which might be encountered because of change. Because of the fact that opinion of all parties in the sector has been welcomed and that an ongoing sharing approach has been adopted and that there is a flexible structure in user management, sector’s negative reactions to audit-related sanctions introduced by the practice vanished. Achievement of positive results in a short time after project implementation reinforced parties’ confidence in the project, with the result that all parties have owned up the project. Multi-channel issues: TRAMER provides service on the Internet as the range of its users is wide and dispersed. Collecting insurance data on its database, TRAMER provides its users with data query and reporting services through its Webpage. An “authorized user” distinction is made for services offered on its Website, with the result that services offered are differentiated depending on levels of authorization.(SupportDoc.:Infrastructure1.jpg) Insurance companies and authorized agents are given “claim status document”, as an essential document required to be obtained for policy production, based on policy and claim information admitted into TRAMER database. Insurance companies get such document by getting computer programs run on their own systems in communication with TRAMER on the Internet. This method is not only a highly safe, transaction-accelarating and error-free method but also comprises URL, a communication technology which we strategically aim to have and which would discipline inappropriate sector practices in a real sense. With an eye to ensuring integration with other e-Government project, a cooperation was made with Ministry of the Interiors and with Ministry of Finance. With the advent of follow-up on the basis of citizenship and taxID numbers in TRAMER infrastructure, insurance companies are now able to carry out policy query transaction in relation to IDCard and taxID Number information through URL technology.(SupportDoc.:Infrastructure2.jpg) Portal page at www.traport.org.tr address was set up with an eye to enlightening whole general public with respect to MotorTPL Insurance. At such portal, with aid of monthly e-bulletin, latest developments in sector are passed to the sector and general public. An insurance expert provides “online consulting” service at such portal page on certain days of the week. SMS query project, being one of the goals, aims to present policy and claim information available in TRAMER database to a far more wider mass in a far more easier way.

Main results, benefits and impacts

With the advent of TRAMER, the following results were achieved: -Uninsurance rate fell down to 23% from %31. -Number of policies is up 48% between 2003 and 2006, while average policy premium is up 63%. -Unfair competition prevented by ensuring policy production at correct tariff through central supervision. -About 700.000 unrecorded policy driven into recorded activity system, putting an end to counterfeit policies. -Counterfeit claims prevented and both vehicle and insured traceability made possible. -A strong database and statistical infrastructure created for a more effective and accurate pricing. (http://www.tramer.org.tr/english/raporlar.php) It is targeted that service quality will be improved further by means of business intelligence practices contemplated to be completed in 2007. -After start-up of service offerings in relation to Motor TPL Insurance, TRAMER’s job description widened to such an extent that it covers other motor vehicles-related insurances, as well. TRAMER started to provide service in relation to Motor Vehicle Casco Insurance and Compulsory Liability Insurance for Passenger Transportation. It is targeted that works in progress in relation to Green Card and Compulsory Personal Accident Insurance for Passenger will be completed in 2007. Aiming at ensuring a uniform application in policy production, TRAMER created claim status document indicative of policy-related claim status and of data as to step to be used in renewal in order that premium decrease and increase rates set out in insurance tariffs and instructions might be applied depending on the risk of vehicle operator and, thus, forcing insurance companies to issue policies only resting on claim status document obtained from TRAMER. Results of effective supervision conducted on application of tariffs and instructions found reflections on quantitative indicators in a short period of time. It is observed that the share of policies issued out of surcharge steps in total number of policies, being 1% in 2003, is rose up to 10% in 2004 and to 14% in 2005 and to 16% in 2006. And, depending on this development, average policy premium being YTL79 in 2003 rose up to YTL129 in 2006. (SupportDoc.:Results.doc-Chart1,Chart2). While uninsurance rate in Motor TPL Insurances as of 31 December 2003 was 31,08%, such rate began to decline after start-up of TRAMER eventually falling down to 23,51% at end of 2006. (SupportDoc.:Results.doc-Chart3) It is seen when first 6-month results of TRAMER project are assessed that number of policies and premium earnings in July-to-December period of 2004 is up 23% and 77%, respectively, compared with the same period of the previous year. In order to clarify the striking development achieved as regards number of policies and premium earnings in the first period of operation of TRAMER, rates of growth in number of policies and premium earnings between 2003 and 2006 are shown in Chart4. (SupportDoc.:Results.doc-Chart4) On the strength of advanced supervision and raised awareness brought by TRAMER practice, unrecorded policies were driven into recorded activity system. Between 2003 and 2006, about 700.000 unrecorded policies turned into recorded policies. And it is observed that the system now settles down quite well in 2007, with the result that unrecorded policies are prevented. Furthermore, companies once had to offer tariff prices to general public with a raise of above 20% every year. Thanks to premium growth achieved by sector owing to TRAMER, tariff premium is up 6% in 2005, while coverage limits going up 25%, which is good for the general public. Collection of MotorTPL Insurance data on TRAMER database made more detailed actuarial analyses possible and, thanks to this, a significant contribution was made to efforts in relation to free tariff regime contemplated to be launched in 2007. Innovation: Most important feature of TRAMER is that it is a project which generates quite big yields in a short period of time despite its low investment cost. Thanks to its such feature, it is possible to transfer the model to other compulsory insurance practices, as well, making use of current infrastructure. Another important feature of TRAMER is that it makes a bridge across all segments related to automobile insurances and that it offers big opportunities for new projects to be carried out by related parties. It is thought that TRAMER will play a key role with respect to technology projects to be carried out between automotive and insurance sector especially for improved technical profitability in automobile insurances. Some important projects: The Exchange Room Project: An exchange room mechanism is planned for tracking the “subrogation claims” of the insurance companies with the data in the TRAMER database. WEB and VPN Query Services for Other Institutions: It is planned that network of services provided by TRAMER will be widened to provide WEB and VPN query service for other related institutions apart from current users. (Automotive Sector, Ministry of Justice, Social Security Administrations…) SMS Query Services: What is aimed by this project is to ensure that policy and claim information available in TRAMER database could be queried by means of SMS. Target mass of this practice comprises a wide base ranging from policy owners, automobile galleries dealing with second-hand cars and citizens intending to buy a car. Online-Real Time Policy Production: Insurance companies transfer daily policy data to TRAMER in XML format and, after basic checks are completed at transfer stage, policy records are taken into database. Thanks to “Online-Real Time Policy” project, such transfer process could be eliminated and errors in policy issue could be prevented at production stage.

Return on investment

Return on investment: Not applicable / Not available

Track record of sharing

Experience acquired in TRAMER practice is shared continuously with foreign persons and institutions at various platforms. In a drive to contribute to financial sector reform process in our country, under scope of an activity called Financial Sector Assessment Program (FSAP), co-handled by the International Monetary Fund (IMF) and the World Bank (WB), a delegation of the IMF and the WB officers visited our country between 5 and 18 April 2006. Said delegation visited TRAMER on 14 April 2006 and was briefed about “TRAMER First Step Project” as well as about new projects in progress. Delegation found after an assessment is done that TRAMER is of such quality as would constitute a model for the developing countries. After such assessment, efforts to establish an infrastructure for providing multilingual support to allow for use in foreign countries started up in 2006. TRAMER project, which ensures high-quality service offerings on the basis of public sector to public sector, public sector to private sector and public sector to citizens, attracts attention abroad, as well, with the result that information-sharing requests are passed by foreign insurance sector officers. In this context, informational meetings were held with officiers of Liberty Mutual Group, Transatlantic Reinsurance Company and FMA Consultores Actuariales in 2007. At such meetings, information as to experience and know-how acquired in TRAMER project and to Motor Vehicle Insurances were shared with such officers. Also in June of 2007, at a seminar organized by the World Bank, information as to TRAMER practices were shared with delegation of Kosovo and Bosnia, as well as with Albanian delegation at an activity held in Istanbul again in June of 2007.

Lessons learnt

The following three main points played a big role in project’s success: I.Representatives of related parties are involved in TRAMER’s management and needs- analysis is made after getting opinion of related parties in regard to project design, II.Communication channels to be needed before and after start-up of project implementation are set up, III.Practice is developed using current information infrastructure and technological innovations are followed up and necessary upgrades are carried out in consultation with sector representatives. After TRAMER project is completed successfully, leading the way to start-up of service offerings for Motor TPL Insurance, the system began to offer services in relation to other compulsory automobile insurances, as well, in a very short period of time. For introduction of such new services, Motor TPL Insurance was taken as a model and methods followed in such project and knowledge accumulation acquired therefrom could be transferred to other projects, as well. The model matured to such an extent that it could be used as a model in countries other than Turkey. Just so, the IMF and the World Bank officers find the project of such quality as might be taken as a model in the developing countries.

Scope: National