ESTIMATION OF THE COSTS OF TRAFFIC ACCIDENTS IN TURKEY: AN EVALUATION IN TERMS OF THE INSURANCE AND FINANCIAL SYSTEM

Özen, Ercan; Genç, Erhan; Kaya, Zübeyde · 2014 · OpenAlex-citations

DOI: 10.19168/jyu.94397

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Summary

This study estimates the total economic costs of traffic accidents in Turkey for the year 2012, specifically evaluating their impact on the national insurance and financial systems. The research addresses the gap in existing literature regarding "non-systemic" costs—expenses such as out-of-pocket medical payments, private vehicle repairs, and labor loss that are not captured in official insurance records. By quantifying these hidden costs, the authors aim to provide decision-makers with a comprehensive view of the financial burden imposed by road traffic accidents, which account for over 90% of transportation activities in Turkey. The methodology combines official statistical data with primary survey data. The authors utilized records from the Turkish Insurance Association, the General Directorate of Security, and the Turkish Statistical Institute to establish baseline figures for systemic costs. To capture non-systemic costs, a face-to-face questionnaire was administered to 506 individuals in the city of Uşak in April 2013. The survey focused on accidents occurring within the preceding year, asking respondents about self-paid damages, medical expenses, and time lost from work. The study assumes that the ratio of non-systemic to systemic costs observed in Uşak is representative of the entire country, allowing the authors to extrapolate local findings to a national scale. The findings reveal that the total cost of traffic accidents in Turkey in 2012 exceeded $4.3 billion. This figure includes material damage, medical care, and labor loss. A significant portion of these costs was borne directly by individuals rather than insurance companies; survey data indicated that nearly 40% of accidents involved damages paid out-of-pocket by victims, meaning they were not recorded in official insurance statistics. Consequently, insurance companies incurred a loss of approximately $233 million from traffic insurance operations in 2012. The study calculates that total accident costs accounted for 16.37% of the insurance system’s volume, 0.36% of the financial system, and 0.55% of Turkey’s Gross Domestic Product (GDP). The significance of this research lies in its demonstration of the substantial macroeconomic impact of traffic accidents on Turkey’s financial infrastructure. The authors conclude that the high volume of claims and losses reduces the profitability of insurance companies, thereby diminishing their capacity to function as financial intermediaries. Since insurance reserves are a critical source of savings for financing real investments, the drain caused by traffic accidents negatively affects the total savings volume and, by extension, economic growth. The study underscores the need for improved traffic safety measures to mitigate these financial losses and preserve the stability of the insurance and financial sectors.

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