TRANSPORT INSURANCES

Due to the general economic crisis together with the heavy competition, the rate of premium increase for the transport insurance branch during the previous year remained below inflation and therefore the premium income decreased significantly in real terms.

The ISM Code, which is an outstanding progress for the world maritime sector, has lead to the preparation of necessary regulations for transport insurances and various clauses have been developed on the basis of this code.

During the year, several clauses relating to "The Year 2000 Problem" were devised and put into application and the provisions prepared hereto have been included in reinsurance contracts underwritten in 1999.

Sectoral expectations were not met during 1998 regarding the renewal of `The General Conditions of Hull Policy' in parallel to `The General Conditions of Cargo Insurance' which was put into force as of 1 August 1996.

The premium income of the marine branch in 1997, where 41 companies were active, increased to 33.1 trillion TL, indicating a growth of 46.38 percent in current prices (TL.) and a decrease of 4.16 percent in USD terms.

Consequently, the proportion of the transport branch premium income in the total premium income dropped to 5.94 percent in 1998 whereas it was of 7.90 percent in 1997.

The 1998 loss ratio, which materialised at 52.96 percent in this branch, indicated a drop compared to the 1997 loss ratio. The branch's share in the total technical profit dropped from 35.79 percent in 1997 to 31.65 percent in 1998.