Having grown around 5 folds during the period of 2004-2005, the Turkish insurance industry is far ahead of insurance industries in other countries with its superior performance.
While the number of insurance companies and their branches increase everyday, the increased awareness about the insurance industry on the part of Turkish society, once again demonstrates the huge potential that Turkish insurance industry has to offer.
Turkish insurance industry on the rise
Today, there's general established consensus in society that insurance is an indispensible aspect of economy. As a tool that minimizes individuals' and organizations' concerns for the future, insurance allows its beneficiaries both to make decisions more easily and to make long term plans effectively.
Well, then what is the current outlook on the Turkish insurance industry? According to information from
Insurance Information and Monitoring Center (SBM), there are a total of 59 insurance companies in Turkey and 26 of these are in life branch while 33 are in non-life insurance branches. It is observed that the increased number of insurance companies along with diversification of insurance branches contribute to further development of the industry. While the total amount of premium generated in 2004 was 6.8 billion TL, this figure reached around 26 billion TL in 2014. Looking at the total premiums paid over the years, it is seen that the insurance industry grew around 5 folds during 2004-2014 and that it displayed a rate of growth higher than average growth rate of GDP every year. This rate of growth is far above the growth rates of other industries in our country and the growth rates of insurance industries of other countries. This accelerated growth once again demonstrates the higher potential that Turkish insurance industry has to offer. In addition, data collected shows a trend of increased awareness about insurance products in the society.
On the other hand, comparing the share of total premiums generated in GDP (1.5%) with that in Europe (5%), once can see that the Turkish insurance industry still has a long way to go. Also the fact that insurance rates are 81% in liability insurance, 28% in comprehensive coverage, 25% in fire and home insurance, 31% in mandatory earthquake insurance, and 24% in life insurance, is another indicator of the huge potential of the insurance industry in Turkey. At this point, among the factors believed to increase the number of citizens with coverage in the future are custom risk analysis and pricing by companies, effective use of technology and social media, and launching new products.
Impact of car insurance on the sector
Looking at policy and premium amounts, it is seen that auto insurance clearly dominates the sector. Parallel to the increase in the number of vehicles in our country, an increase in the amount of liability insurance coverage is observed in our country. While in 2014, a total of 17.926.000 liability insurance policies were arranged, this figure rose to 18.890.000 in 2015. A similar increase was observed in liability insurance premiums as well. Total premium generation which was 49 billion TL in 2014, increased to 6.75 billion TL in 2015. In the liability insurance branch where the insurance rate is the highest, the highest insurance rate was attained in the auto insurance category, which had a rate of 92.72%. This was followed by truck category with a share of 88.54% and minibus category with a share of 82,38%. And highest non-insurance rate was observed in the motorbike and tractor categories. And looking at the insurance rates in city breakdown, it is seen that Istanbul has the highest insurance rate, which is 91.7%. Istanbul is followed by BIngol with a rate of 89.66%, Trabzon with 88.93% and Ankara with a rate of 88.19%.
Comprehensive Coverage is Growing
Again, based on information from
SBM, while a total of 4.5 billion TL premium was generated from 5.5 million comprehensive coverage policies arranged as of 2014, total number of comprehensive coverage policies arranged increased by 9% and reached 6 million policies as of the end of year 2015, corresponding to a total premium generation of 4.9 billion TL. On the other hand, a similar increase was observed in comprehensive coverage claims as well. While a total of 1.5 million claim files were opened as of 2014, this figure increased by 7% and reached 1.6 million as of the end of 2015.
In Turkey around 3.000 accidents with material damage take place everyday. And this corresponds to around 900 thousand accidents on a yearly basis. Based on statistics from 2015, the cities with highest numbers of accidents with material damage are İstanbul, Ankara. İzmir, Bursa, Antalya and Kocaeli. And in terms of number of accidents per vehicle top cities are İstanbul, Kocaeli, Bursa, Yalova and İzmir.
In 2014, a total of around 22.8 million life insurance policies were arranged. And in 2015, total number of policies arranged remained at a similar level. On the other hand, total number of policies in effect which was 26 million by the end of 2014, increased by 3 million and reached 29 million as of the end of 2015.
As part of the "Mandatory Personal Injury Insurance for Mine Workers" which took effect as of the end of June 2015, insurance policies were arranged for a total of 142 mine pits in 120 minefields out of 894 mine fields in Turkey. With the policies arranged, a total of 27.974 mineworkers have been covered and total premium of 17.5 million TL has been generated.
Health Insurance is on the rise as well
In the private health and travel-health branches, a total of 2.7 million policies were arranged during January-December of 2014 while 96% of these policies are in personal insurance category and 4% are in group insurance policy category. On the other hand, during January-December of 2015, this figure increased by 7% and reached a total of 2.9 million policies while 96% of these policies are in personal insurance category. A comparison of the January-December period of both years shows a 6% increase in the number of personal insurance policies and a 12% increase in the number of group insurance policies.
With the new "Bylaw for Insurance Expert Appointment" that entered into effect as of 25 November 2015, a new era started in terms of expert appointment. With this bylaw, insurance companies have to decide within one business day, weather or not to appoint an expert and to send this information to
On the other hand, with the new bylaw, beneficiaries are able to appoint their own expert at their own expense at any time after claim notifications are sent to SBM. Both the insurance company and the beneficiary have the right to raise an objection to the expertise report arranged by the experts appointed by the other party. Objection experts are appointed automatically by the system. In any case, the expenses of the randomly appointed expert belong to the insurance company. In case of a lack of reconciliation between the expert report prepared by the expert appointed by the beneficiary and the expert report prepared by the expert appointed by the insurance company, an arbitrator expert is appointed upon mutual request of the parties and the expenses of the arbitrator expert are paid for by the party making the request.
It has been observed that, during the period after the bylaw too effect, in 90% of the cases beneficiaries preferred to appoint their own experts at their own expenses.
Insurance Information and Monitoring Center (SBM) Managing Director
We offer unique solutions
Established with a profound vision 12 years ago, Insurance Information and Monitoring Center (SBM) now offers effective solutions to the Turkish insurance industry and citizens as a unique organization in the world.
Today insurance companies transfer insurance data in all branches in real time to central database of SBM. And millions of citizens use heavily, the services offered by SBM that bring a great deal of convenience for them in daily life. Having shared his views about the issue, Insurance Information and Monitoring Center (SBM) Managing Director Aydın Satıcı gave information about SBM's services and his outlook on the sector. Aydın Satıcı describes SBM as a great achievement of the insurance industry and said: "One of the biggest development and advancement leaps that Turkey has made during the last 12 years has been the establishment of SBM. Today it is not possible to imagine an insurance system without SBM. Mobile Accident Report application which brings incredible time savings and convenience in accident report creation, provides and keeps track of detailed accident location data, allows insurance companies to contact their customers proactively, and starts claim process right away thus maximizing customer satisfaction, is a one of its kind application in the world. And world record in this area belongs to a citizen of ours in Karaman. By completing the accident report creation process using the mobile application in only 5,5 minutes, our beneficiary broke a new world record. Another world record has come with the process that includes accident report creation and fault rate assessment processing which were completed in only 10 minutes. And that's a world record. Today, all senior executives in the industry that set the direction of the Turkish insurance industry are now able to monitor the sector in real time using the real-time dashboards available in all branches. No other industry, neither in Turkey nor in the world, offers such real-time and sector-specific reporting capability."
Aydın Satıcı also provided information about the "Replaced part SMS Service" which has recently been launched as a unique application in the world. Satıcı concluded his remarks as follows: "Our 5664 SMS Claim Inquiry service is being used heavily by our citizens for over six months now. This year, we added a new feature that allows us to share with beneficiaries via SMS, the information about repaired or replaced parts as well. There's no other service in the world that provides repaired part information so conveniently. And this new service has attracted great interest from public as well. We receive around 15 million SMSs per year via the 5664 SMS service. Our citizens are very lucky. They're now able to obtain detailed information on claim history or replaced parts for any used vehicle they're planning to buy. And we're once again proud that this service of ours is unique in the world as well.
As Insurance Information and Monitoring Center, we're extremely happy to be a unique organization and to be providing unique services. As SBM and the insurance industry, we will continue to support development and growth of Turkey with new world records."
SBM is the 2015 Champion of InovaLIG
By leaving behind the leading brands of Turkey at InovaLIG, Insurance Information and Monitoring Center (SBM) became the champion in "Innovation Life Cycle" category among 488 companies based on jury's evaluation.
On the last day of Innovation Week 2015 which was organized by Turkish Exporters' Assembly (TIM) and lasted for 3 days companies and organizations deemed to be innovative with their projects in different categories have been given awards. Organized by TIM, InovaLIG is recognized as Turkey's first innovation development program. As part of this project brought to life with a configuration similar to IMP3rove program applied in 17 countries and coordinated by AT Kearney, innovation reports of 488 companies in Turkey were created. Based on these reports, InovaLig Grand Jury selected the leaders of Innovation in 2015 in 5 different categories.
The winners received their awards from president Tayyip Erdogan, Minister of Economy Mr. Mustafa Elitas and TIM president Mehmet Buyukeksi. SBM managing director Aydın Satıcı received the championship award from President Mr. Recep Tayyip Erdogan. With this achievement, Insurance Information and Monitoring Center was selected to represent Turkey next year at "IMP3rove Europe Championship".
With this award, which went to the insurance industry as the most innovative industry, the sector reaped the benefits of its technological investments in recent years at the highest level. Insurance Information and Monitoring Center (SBM) CEO Aydın Satıcı shared his feelings and opinions about the award and stated that championship award belongs not only to SBM but to the sector as a whole as the whole insurance industry acted as a single team. Satıcı said "Insurance industry is behind every phase of SBM's projects ranging from initial idea to development and from budgeting to launch." Satıcı stated that there's a misperception that the award was won due to the mobile accident report application they have developed however that, they received this award because the innovation life cycle processes employed by SBM are close to perfect.
Satıcı also mentioned that there's a six month period of hard work behind the award and that after initial application, innovation culture of the organization was laid on the table via surveys and field visits and then they entered among top 10 finalists from among 488 companies. Satıcı said that the jury was extremely impressed with the presentations made and their field visits which demonstrated SBM's product development speed and added that especially in the area of mobile applications and SMS inquiry services, they've been developing a new product every two weeks and they adopted the agile method in all these processes and that this approach allowed them to develop new products on a continuous basis. Satıcı indicated that SBM, with its vision of "being the technology powerhouse of the insurance industry", continues its operations and projects with the mission of developing innovative solutions that would improve the profitability of the insurance industry and increase public trust in the insurance system. Satıcı said "We started this journey with a team of 65 professionals in 2012 and now we are team of 110 young and innovative professionals have attained a growth rate of 72% during the last 4 years. Average age at SBM is 31 and most of our team members are engineers. Our major principle is to motivate our employees to develop new ideas. And seeing that all our efforts are crowned with such an award made us extremely happy. We've received the appreciation of all players of our industry."
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