Insurance Information and Monitoring Center (SBM) General Manager Aydın Satıcı who stated that they've recently purchased a software package for fraud prevention said "As SBM we focus not only on individual fraud cases but mostly on organized fraud cases. We now focus on fraud cases that a single insurance company wouldn't be able to detect on its own. Because it is not possible for an insurance company to detect organized fraud cases by itself".
What's your perception in general, about the rate of growth and progress-with figures- of the Turkish insurance industry?
In terms of growth rates, I can say that the insurance industry in Turkey is in a much better condition than the European countries. Because of cultural similarities and similar level of population, we see Germany as being very close to Turkey. Germany's GDP is much higher than that of Turkey. The insurance industry in Germany has a share of 7% in GDP while the share of the insurance industry in GDP is only 1.5% in Turkey. Thus we believe that Turkey has a rapidly growing huge potential. Looking at the last 6 years, we see that the industry has grown 120% in real terms. In addition to growth, you also need increased profitability to ensure sustainability. For growth to continue and increase, the industry has to make profit from the new investments it will make. If the loss from liability insurance can be covered, it looks like there wouldn't be any other problem left for the insurance industry. It is seen that the total amount of premium generated during a period of 12 months was 30 billion TL. But in fact this figure can be easily as high as 100 billion TL depending on non-insured rates and penetration levels.
I believe this has something to do with the increased awareness for insurance as a result of increased education of public about the importance of insurance. It looks like there's an increase in liability insurance premiums but in fact the beneficiaries should look more into the kind of coverage he gets for the price he pays. Liability insurance pays 2 million 958 thousand TL compensation per accident. And this is a great contribution of the insurance industry to the society, economy and our citizens. If the public is educated more about compensation and premium comparisons, I believe insured rate will increase and the sector will reach the point it deserves to be at. The total value of risks covered by the sector in return for 30 billion TL of premium is 80 trillion TL. And this figure is equal to 30-40 times the GDP of Turkey. There's still a growth potential in our country. There must be more advertising and promotion to tap this potential. Information on the insurance sector should be provided not only via insurance sector magazines but also via all other media. I believe that the sector will grow at a higher rate next year.
What do you think the real-time data transmission brought to life by SBM for the first time in the world and the system that categorizes all data and shares with the sector adds to the Turkish insurance industry?
When somebody gets coverage, all his information is sent directly to SBM's database even before he grabs his policy file. The faster we analyze data at hand and offer for use by the sector as summary reports, the faster the sector would be in product analysis in and in offering the right product for the right customer in a specific region. Our new application called Kokpit allows the senior executives of the insurance companies to better analyze the trends and progress of the insurance industry and make healthier forecasts. The application also allows the users to make comparisons on the basis of years, market shares, number of policies written, premium generation, average premium generation and number of effective policies. They can use the application on tablets and smart phones as well. Based on our observations, first thing in the morning, a general manager opens the Kokpit application and see the current situation in the sector and get an analysis with a single click for his company or for the sector as a whole. We helped the sector to become completely mobile. This gives a huge power to the sector. The reports we offer them as they make strategic decisions serve as an perfect guide for them. We wish to add new features to the application, such as the one that allows you to make monthly or semi-annually forecasts. Such reporting is not seen in any other sector neither in Turkey nor in the world. I see this application, which is the first of its kind in the world, as a competence, and power that the Turkish insurance industry has.
What conveniences do you believe digital solutions would bring to the sector and beneficiaries in risk analysis and claim processes in the future?
Digital solutions provide great benefits to beneficiaries in claim processes. Now when faced with a claim situation, a beneficiary can instantly notify his insurance company using these digital solutions. And the insurance companies can reach their beneficiaries before the beneficiaries reach them. For instance, thanks to Mobile Accident Report (MKTT), which is another first in the world developed by SBM, insurance companies can instantly learn about the accident when drivers involved in an accident use the application and reach their beneficiaries right away. Also compared to the traditional method used before, beneficiaries can finish the process 7 to 10 times faster. There are 27 million drivers and 19,5 million vehicles in traffic. And there are 35 million smart phones in our country. In other words, Turkey now has an application that can be used by 19,5 million vehicle owners and 27 million drivers. Another digital solution offered to the sector is the telematics application. With this application we install a small device on the vehicle and the deice records the driving habits of the drivers.
Drivers who have confidence in themselves will soon have telematics devices installed in their vehicles to prove their good driving skills and all data regarding their driving habits will flow to SBM, and this information will be shared with the insurance company after the approval of the individual and those drivers that have good driving records will get serious discounts from the insurance companies. The better you drive the less would be your risk of being involved in an accident. And we see that that beneficiaries are willing to take part in this system. We're planning to bring to Turkey these models, which we see abroad. GSM operators are working on this too. Talking about digitalization one thinks about the Internet of objects, and devices are smarter now and can talk to each other. In the future, when a device with telematics installed gets involved in an accident, these devices will be able to create an accident report depending on the severity of the impact and damage and get the information of the other vehicle involved in the accident. Parties will be able to instantly enter policy and driver information in the accident report form and send it to the insurance company. We will also develop location-based applications to allow companies to make better risk analyses. For instance if flood risk is high at a certain location, we'll be able to detect it on the map and insurance companies will charge their premiums for these areas accordingly. In addition we also have the location information related to the accident reports we receive via the mobile accident report application. We have statistics about the time intervals and locations when and where accidents take place most frequently and we share this information on Internet. If a precaution should be taken in that area, we expect all public offices to make use of the accident intensity data we gather.
What would you like to tell us about the Mobile Accident Report Application, which is one of the major applications that SBM has developed? Are you planning to improve anything about the application in the coming term?
Soon we'll roll out a new version of the Mobile Accident Report that has additional features. We'll add a profile creation feature. Drivers will create their own profiles after installing the application and fill all their policy information in advance. They will be able to enter all necessary information required for the report in advance. This way when drivers that have created their profiles in advance are involved in an accident, they will shake their phones and share their profiles with each other and this will speed up the report creation time a lot. Mobile Accident Report creation time which is currently 10 minutes will come down to 1 minute with this new feature. After an accident, the drivers will only take pictures of the accident scene and finalize the process by shaking their phones. The new version is much easier to use. We also want to add video recording capability to the Mobile Accident Report. Currently it is possible to record sound but with the next version we want to allow the drivers to record video. This way the drivers will be able to share the video both with us and with the insurance companies.
What kind of an information exchange do you have with the developed countries or countries in our region that have immature insurance sectors?
Insurance associations from numerous countries visit us and we brief them about all the projects we've completed. Some of them get shocked and amazed when they see our projects and tell us that they're really impressed and say they will start new projects to commission similar applications in their own countries. In that sense, we've made a few meetings with the insurance association of Azerbaijan. We had meetings with delegations from Tunisia, Mongolia, Albania and France. There's an enormous demand in our insurance industry from abroad and we share with our guests all these applications with all their details. Some countries wish to set up structures similar to that we have here. And they get in touch with us when they face technical difficulties as they develop their own applications. And as SBM we visited United Kingdom. We visited insurance fraud bureau in London. We observed the methods they used for detecting fraud cases. After our visit, based on the model in England, we established a similar system in Turkey for detecting insurance fraud cases.
SBM aims to detect 25% of the fraud cases. What would you like to tell us about SBM's work in this area and the contributions it will make to the sector?
As SBM, we purchased a software package used in fraud prevention. The system makes claim file scoring based on data at hand. Claim file is actually saved in a network and it is possible to score that network too. This way it becomes easier to detect fraud cases. Files with high-risk scores carry the risk of being involved in fraud. Using analytical methods, one can monitor fraud. As SBM our focus is not individual fraud cases but mostly organized fraud cases. We've focused on fraud cases that an insurance company wouldn't be able to detect on its own. Because organized fraud cases can't be detected by a single company. In order to detect the organized crime, one needs to see the whole picture and access information on all stakeholders. Such organized fraud usually involves multiple companies, multiple experts and repair place. Because we have all information, we can see the network of relations between all stakeholders. Within SBM, we established a fraud-prevention unit. Using the social network analysis tool, this team analyzes the files and networks with the highest risks based on the graphs. When a definite fraud case is determined, we prepare the relevant file and contact the relevant units. According to an international report, company is able to detect 5% of the fraud cases. But with structures like SBM, which can see the whole picture, this can be as high as 25%. Currently, we have determined around 2 million TL worth of claim files to be fraudulent and we shared this information with insurance companies. We expect this figure to go up to 100 million TL within the next year. It is important for those involved in fraud are punished and this is demonstrated in media. What matters is to prevent fraud before it happens using certain deterrent measures. We believe fraud cases and especially organized ones would decrease to a great extent after being featured in media.
SBM introduced numerous applications that are first of their kinds in the world and that ease the lives of both beneficiaries and insurance companies.
In the coming term, we'll have certain location-based services and with these, we aim to allow companies to make healthier risk calculations. Telematics application is now in our agenda too. On the other hand, there are certain applications that provide social media analytics, and with these applications we want to monitor social media and include it in risk analyses for fraud cases. Also, by analyzing negative talks about a company or complaints about products as featured in social media, we'll help insurance companies to understand their customers better. Undersecretariat of Treasury created a mandatory individual accident insurance product for mine workers. There are around 100 mine workers in Turkey. With this new policy, every miner is entitled to a coverage of 150 thousand TL. We've worked a lot on this issue. Experts of insurance companies inspect the mines and if a mine receives negative score as a result of the inspection, companies don't insure that mine and we share that negative report with the relevant institutions. These businesses are subject to inspection but they go through a second inspection by the insurance industry as a second eye. Mine owners can view the negative reports from our screens.
In light of technological developments, all companies develop certain projects aimed at distribution channels and their beneficiaries. What results do you get when you compare the technological applications used in our country and the technological infrastructure with world trends?
Honestly, even in America, which has the most advanced technologies, when a technological product is launched, you can see it in Turkish market for sale in a few days. I think we are more advanced in certain areas of technology. Especially with the Mobile Accident Report and Kokpit, we pioneer the global insurance industry. Currently, serious investments are being made in the areas of analytics, social media, mobility and cloud applications in the world. And these applications are getting wide spread in Turkey as well. Our social media usage rates are much higher than those in other countries. So it makes a lot of sense to develop applications for social media. I can say that we are at the same level with the world in terms digital advancements and that we are even more advanced in certain areas. We are a country that uses technology rather than a country that develops it but we are very good at following up technological developments and we use technology so well.
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