Page 12 - Turkinsurance Digital Magazine

10 cover story

Sector-specific measures were announced

General Directorate of Insurance of the Ministry of Treasury and
Finance also announced precautions right after the first case of
outbreak in our country. Precautions taken to make sure that
insurance services for the society continue without any inter-
ruptions included remote expertise transactions, extension of
deadlines for applications to Insurance Arbitration Committee,
extension of deadlines for insurance premium payments, reduc-
ing personal contact by efficient use of several digital programs,
waiving additional premiums for renewal transactions of traffic
insurance policies, and cancellation of actuary exams.

It is estimated that these new decisions will result in an increase
of costs, especially in the health insurance segment, while num-
bers of new sales and renewals have begun to decrease. As the use
of policies have decreased in lines such as motor casco and travel
insurance during the outbreak, a significant amount of penetra-
tion loss is expected. A negative impact is estimated on commer-
All medical examinations were covered by the health insurance cial credit insurance and bond insurance products due to eco-
policies until a COVID-19 diagnosis was made, but the following nomic slowdown; while products such as loss of profit, directors
treatment costs were not. Despite this rule, Turkish insurance and officers’ liability, cyber risks, employers’ liability, marine,
market took responsibility. One by one, insurance companies construction and engineering will probably face negative results
began to announce that COVID-19 treatments were included in due to stagnant economy as well as changing living conditions.
the scope of health insurance policies as an ex-graita payment.
Atilla Benli, President of the Insurance Association of Turkey, Threat is global, not specific to Turkey
stated that many insurance companies contributed to the spirit
of solidarity, as a result of which, 80 percent of private and com- The pandemic is expected to cause serious damage in global in-
plementary health insurance policies started to provide coverage surance market. Many insurance lines and reinsurance markets
for COVID-19 treatments thanks to changes in the special policy are estimated to receive negative impacts in the coming term,
conditions. while financial tables of insurance and reinsurance companies
will probably suffer from a similar fate. Due to the pandemic that
Agencies are impacted by the crisis, too has deeply impacted the insurance market, large companies such
as Allianz, Munich Re and Willis Towers Watson reduced their
Insurance agents who generate 70 percent of overall market targets for 2020.
premiums were previously the most important representatives of
face-to-face sales activities. However, under these circumstances Working methods have changed in many sectors including the in-
transactions that require personal contact have been put on hold surance sector due to COVID-19 pandemic. As a market that has
by the consumers. As a sector that involves high level of inter- recently been focusing on digitalization, Turkish insurance mar-
action, insurance market has adopted the home-office working ket has started using their investments in this area much more
method together with its agents. Thanks to technical support ac- effectively during this pandemic. A significant part of the market
tivities such as removing static IP address, agents have become has adopted the way of working remotely from their homes, and
able to do their job remotely; but are concerned that this pro- communication and meeting activities have been carried to digi-
cess will be longer than expected. They can currently continue tal environments. As an important distribution channel of the in-
working thanks to the support they receive from the government surance market, agents are also conducting their communication
and insurance companies; but also emphasize that their loss of and marketing activities through digital means. Insurance com-
income might be substantial if the circumstances continue to re- panies have taken a lot of precautions to protect their employees,
main unchanged for a longer period. customer portfolios and distribution channels; while conducting
several activities to gain new customers. As consumers have be-