Allianz Türkiye (C): Managing the 2017 Hail Storm

Allianz Turkey is a property casualty insurance company operating in a region experiencing increasing losses from natural catastrophe events related to climate change, for example hail, wildfire, and flooding. There are also substantial other natural catastrophe exposures including earthquakes. The operating environmnent includes high inflation and worsening exhange rates, both of which make it challenging to set premiums and to resolve claims when those milestones can occur years apart. In many ways the existence of these natural and financial pressures and the high awareness among the population of natural catastrophe hazards makes Turkey a precursor to what might occur in Europe and North America in the face of possible increasing perils related to climate change.
The company has a dilemma at the time of the case regarding how to satisfy customers and settle claims from a hailstorm without historic precedent, which damaged tens of thousands of automobiles as well as other assets. How should the company satisfy these customers today? Should it avoid writing policies in higher risk areas in the future? Are there other ways to identify and manage risks in addition to contracts?
The "B" case discusses the earthquake of 2023 and the "C" case discusses information technology, sensors, and predictive analytics that the company now uses to help manage the onset of and response to natural catastrophe situations.