Page 32 - Turkinsurance Digital Magazine

32 interview

35.3 billion at the end of 2020, it reached TRY 264.4 billion Moreover, with the adoption of international standards like
by the end of 2024, marking a strong increase. This increase TFRS 17 in reporting and accounting, insurance companies
has not only enhanced balance sheet resilience but also support- are now able to present their financial performance in a more
ed companies’ operational flexibility and long-term strategic comparable and transparent manner. This has the potential to
planning. enhance the credibility of Türkiye’s insurance sector in the eyes
of both domestic and international investors.
The capital adequacy ratio similarly displayed an upward trend.
While the ratio stood at 154% in 2020, it reached 180% by The recent regulations introduced by our regulatory body SED-
the end of 2024. This improvement indicates a strengthening of DK are intended not only to address the risks of today, but also
risk management capacity across the sector, as well as better to transform the sector into a structure fit for the needs of
alignment with the regulatory framework in this regard. the future. This transformation also aims to integrate Türki-
ye’s insurance market more strongly into the global competitive
When evaluating the profitability development of the insurance landscape.
and pension sectors over the past five years, a consistent im-
provement in profitability indicators is observed. While techni- Earthquake risk remains one of the most pressing
cal profit was TRY 11.3 billion in 2020, it reached TRY 103.7 issues on Türkiye’s agenda. What developments is the
billion by the end of 2024. Likewise, period profit, which stood Association involved in within this area?
at TRY 10.1 billion at the end of 2020, rose to TRY 102.8 bil-
lion in 2024. These developments demonstrate that the sector We live in an earthquake-prone country, and unfortunately,
is not only growing financially but also strengthening its foun- our neighboring geography faces the same reality. AFAD re-
dations by increasing its risk-bearing capacity and operational cently announced that approximately 110,000 earthquakes
efficiency. Throughout this process, both profitability indicators occurred in our country and its vicinity following the Kahra-
and capital adequacy have shown a positive trend that reinforces manmaraş-centered earthquakes of February 6. These figures
the sector’s overall stability. This strengthened structure not only remind us that when it comes to earthquakes, the time to act is
enhances the insurance sector’s credibility in the eyes of investors “Right Now.”
but also establishes a solid foundation for sustainable growth.
The earthquakes have clearly revealed the necessity of re-eval-
The recent development of the sector is closely tied to its uating the safety of residential areas, building standards, and
ability to comply with regulations. How do you evaluate urbanization policies.
the sector’s stance regarding new regulations?
As the insurance sector, we play a critical role in this trans-
The regulations in our sector aim to make it more resilient and formation. By accurately analyzing risks and offering suitable
reliable through a wide framework ranging from financial sound- insurance solutions, we support the development of safe and
ness to corporate governance. sustainable living spaces for individuals.

This approach focuses not only on eliminating short-term risks but To this end, as the Insurance Association of Türkiye (TSB), we
also on ensuring a long-term structural transformation. began working on our Earthquake-Focused Insurance Reform
Agenda immediately after the 2023 earthquakes.
Financial resilience is essential for insurance. In this regard, we
must underline the significance of the recent steps taken by our Our Earthquake-Focused Insurance Reform Agenda, which
Insurance and Private Pension Regulation and Supervision Agen- took approximately six months to prepare, includes multi-fac-
cy (SEDDK) to enhance stability and security within our industry. eted and multi-stakeholder reform proposals centered on the
The latest capital regulation has especially strengthened the fi- “insured,” ranging from the integration of earthquake risk—
nancial resilience of our companies and serves as a shield against one of our country’s most critical vulnerabilities—into all in-
potential risks. At the same time, capital adequacy regulations surance policies with standardized and specially designed cov-
stand out as a factor that boosts confidence in both investors and erage, to increasing insurance penetration, creating alternative
policyholders. funding mechanisms, enhancing the knowledge level of distri-
bution channels, raising awareness, and introducing sectoral
On the corporate governance front, the clarified rules regarding regulations.
internal control, risk management, internal audit, and compliance
systems are not merely formal requirements but are addressed as While developing these reform proposals, we benefited from
an integral part of business processes. The aim is to enhance the successful practices and examples from around the world. At
effectiveness and independence of boards of directors and to in- its core, all of these reforms aim to strengthen the perception
crease transparency in strategic decision-making processes. This of “insurance” and raise earthquake awareness. The agenda
reinforces accountability, corporate ethics, and reputation man- includes a wide range of initiatives and numerous projects that
agement in the sector. everyone can take part in.