Page 14 - Turkinsurance Digital Magazine

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2025 Will Be the Year of Transformation in Insurance

Ahmet Yaşar, Vice President of Türkiye Sigorta Birliği
(Turkish Insurance Association) and President of Maher
Holding Sigorta Group, evaluated 2024 from the perspective
of the insurance sector and shared his predictions for 2025.
Yaşar emphasized that 2025 will be a year of transformation
for the Turkish insurance industry.

Ahmet Yaşar, Vice President of Turkish Insurance
Association and President of Maher Holding Sigorta Group,
stated that 2025 will be a year of transformation for the
Turkish insurance sector, with the industry placing greater
emphasis on technical profitability in the new year. Yaşar
evaluated 2024 from the perspective of the insurance sector
and shared his predictions for 2025.

Yaşar noted that 2024 was a year filled with both growth and
challenges for the insurance sector, with the year expected to increasing technical income and reducing dependency on
close with a production volume of approximately 895 billion financial income emerged as a long-term necessity.”
TL. He stated that 800 billion TL of this production would
come from non-life insurance, while 95 billion TL would Cost Management Will Be Crucial in 2025
stem from life insurance. He added, “However, it is worth
mentioning that this growth was also shaped by goals such Ahmet Yaşar also touched upon the key issues on the
as strengthening infrastructure, increasing product diversity, sector’s agenda for 2025. “2025 is poised to be the year
and improving penetration.” of transformation for the Turkish insurance sector,” said
Yaşar, emphasizing that while the sector will make progress
In 2024, Financial Income Surpassed Technical in areas such as disaster preparedness, digitalization, and
Income product diversity, it will also have to maintain balance in the
face of economic changes.
Ahmet Yaşar stated that in 2024, health insurance continued He pointed out that the increase in the minimum wage could
to grow, driven by increasing awareness and costs. He lead to cost increases, particularly in the traffic branch,
remarked, “We believe that new group insurance policies health, and employer liability insurance. Yaşar noted that
and customized packages have attracted the attention of both this situation would require a revision of insurance premiums
individual and corporate clients. Despite challenges in traffic and that cost management would become crucial for both
insurance, branches such as motor own damage (kasko) and policyholders and insurance companies.
financial insurance have provided new revenue streams for the
sector. The loss/premium ratio in traffic insurance exceeded Ahmet Yaşar stated that the Central Bank’s interest rate
175%, significantly increasing the industry’s costs. This reduction policy could create complex effects for the sector,
loss was offset by financial income; however, this approach saying, “A low-interest environment will lead to a decrease
may fall short of ensuring sustainable growth for the sector. in financial income, which will push the sector to focus more
The dependency of insurance companies on financial income on technical profitability, or core business profitability.
leaves the sector vulnerable to changes in interest rates. However, the economic growth resulting from lower interest
While a decline in interest rates may reduce investment rates could increase insurers’ business volume and create new
income in the insurance industry, narrowing profit margins, markets. Insurance companies can support growth by offering
it could also stimulate greater demand for insurance and products and services that meet the increased demand in this
boost economic activity. Insurers can mitigate these effects environment, while also taking advantage of digitalization
by focusing more on underwriting profitability, which we call and innovation opportunities. This situation will positively
core business profitability, and product innovation.”
impact the long-term sustainability and profitability of the
sector.”
Yaşar noted that in 2024, the rate of insurance coverage
remained low in mandatory insurance lines, with the uninsured Yaşar emphasized that regulations and sector collaboration
rate in traffic insurance still around 20%. He highlighted that play a critical role in solving the issues threatening
this situation stems from both a lack of insurance awareness sustainability in insurance, stating, “In the long term, it is
and a factor that limits the sector’s revenue targets. Yaşar necessary to establish a more predictable claims management
also emphasized that in 2024, financial income surpassed model and standardized calculation criteria. Additionally,
technical income, stating, “Technical losses and high costs measures such as the use of technology, public-supported
in traffic insurance made insurance companies dependent regulatory frameworks, alternative dispute resolution, and
on interest income. While high interest rates provided a universal arbitration mechanisms can help control costs.”
short-term solution for the sector through financial income,