Page 18 - Turkinsurance Digital Magazine

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and the messages sent to international reinsurance markets due vehicle insurance, telematics products, products with increased
to the effects of the significant natural disaster and inflation. service content, and usage-based models where payments are
made based on annual or monthly usage without telematics,
Additionally, as stated in the Medium-Term Program announced alongside the driver. Another new trend in automotive products
by our government, efforts are ongoing to expand the coverage is that automobile brands and companies with large data sets are
within the scope of the Natural Disaster Insurance Institution, showing significant interest in auto insurance.
providing coverage for other disasters, primarily floods and
landslides, under the Compulsory Disaster Insurance. The mentioned new sub-product groups are growing every
period compared to standard products, and while the services
In this context, the drafts of the legislation related to Compulsory and structures of these products are expanding, standard auto
Disaster Insurance have been shared with our Union by the SEDDK products still appear to be the most sold products globally. It
(Insurance and Private Pension Regulation and Supervision can also be observed that the areas of development in products
Agency), and our Union's views and suggestions on these drafts, are evolving in terms of service content. The responsibilities of
along with the opinions collected from our member companies, as automobile manufacturers regarding modern technological tools
well as our proposals regarding the implementation of Voluntary and software for new types of technology are being discussed
Earthquake Coverage during the transition from Compulsory intensively. However, we observe that new types of products that
Earthquake Insurance to Compulsory Disaster Insurance, have go beyond conventional auto products have yet to find a place in
been shared with the relevant parties. the global market.

Although completion insurance for buildings When looking at the Turkish auto insurance market, it appears
to be a market dynamic that follows global developments and has
holds significant potential, it also requires product development trials similar to those worldwide, yet still
additional regulatory needs. continues to sell classic comprehensive coverage packages and
traffic insurance. Therefore, there is no change expected that
In the second half of the year, we will be discussing topics such as would significantly impact the market for new products. From a
more free tariffs, the Baremo that will reduce traffic costs, and regulatory perspective, innovations implemented in Turkey's auto
the restriction of depreciation coverage. sector include the activation of the Traffic Production Platform
to prevent accidents, the Damage Cost Index, and the introduction
The Roof Law will also come into play in this context. There is of regulations regarding the 4th to 7th step distribution, alongside
an ongoing effort to review the Insurance Law, which has been the Avoidance Directive. These regulations aim to monitor
on the agenda for about two years. In this context, the SEDDK production in the comprehensive and traffic insurance sectors
is conducting legislative draft work on personal liability articles within specific ratios, with the goal of increasing the production
regarding the licensing, license return, and revocation of licenses volume in traffic to five times the paid-in capital.
for insurance companies. As a sector, we shared our views with
the SEDDK at the end of 2023, encompassing all articles of the In this context, it appears that in 2024, there will be changes in
Insurance Law. We continue to work with the SEDDK on the the market positions, market shares, and product compositions of
topics mentioned above. the players producing in the market. However, these composition
changes have not significantly affected the total production of
On the other hand, as the TSB, we have shared our views on the the sector, independent of economic dynamics. Thus, it is evident
creation of a framework law, particularly one that includes a that willing and unwilling players are adjusting their market
special contract law for insurance and a compensation structure, shares on a product basis, but there are no issues regarding
with the SEDDK, and we are preparing in this regard with production quantities or a lack of production in the market.
consultants. We believe that our sector’s claims costs and claims
payment processes will improve only through these efforts, and The primary reason for the changes in market shares is the
we are making preparations accordingly. attempt to cover the technical losses in the traffic sector with
productions from comprehensive insurance and other branches.
Therefore, the second half of the year will be a period during The relatively better technical results in comprehensive insurance
which the TSB will accelerate its work, increase efforts to suggest that some companies are trying to increase their market
reduce claims costs and durations, invest efforts in infrastructure share by producing more in this area, thus creating competition.
improvements, put in effort for legislative foundations, and strive Following the fixed and rate increases in the first four months
to create new production areas with the increase in premiums. of traffic, along with the Avoidance Directive, a more balanced
market has emerged, involving more market players.
How have the innovations in the automotive sector affected
these areas? Although traffic damages have decreased, what From this perspective, 2024 marks a period where all players
kind of development do you expect in the long term? are striving to gain a larger and more balanced market share. In
the second half of 2024, it is expected that the technical losses in
Innovations in the automotive sector in the world and Turkey are traffic, along with rising costs and a diminishing positive impact
concentrated in several areas. In particular, there are electric on financial income, may lead to an increase in unprofitability.