Page 13 - Turkinsurance Digital Magazine

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constrictions during the COV- March due to the coronavirus pandemic. Insurance market has
ID-19 pandemic, preferred to experienced serious losses due to the coverage of cancellations
buy from online sales channels. in travel insurance, as well as in organization insurance which
Accordingly, as a market that cover the cancellation of big events and organizations. Cancella-
has already begun to transport tion of gigantic global organizations such as the Tokyo Olympics
their business processes to dig- and UEFA Euro 2020 Championship are estimated as one of
ital platforms, insurance mar- the most important problems currently faced by the insurance
ket is estimated to put greater market.
emphasis on digital channels in
the coming days with the aim
of addressing this inclination Recession will shrink the insurance
of customers. The market is market
expected to take steps towards
expanding the range of prod- Global impacts of coronavirus on the insurance market are not
ucts sold on online platforms. limited to those discussed above. Changing customer behaviors
Moreover, insurance compa- have resulted in insurance needs being pushed into the back-
nies that have had to transition ground. Individuals have abstained from renewing their exist-
to remote working model dur- ing policies and been reluctant to buy new products during this
ing the pandemic, are estimat- time of uncertainty. Financial markets have experienced neg-
ed to switch to hybrid working ative impacts as well; therefore, growth of insurance market,
models in the coming period. which normally grows in parallel with the economy, is expected
to remain limited. Economic slowdown is estimated to cause a
Furthermore, assistance servic- global shrinkage in demand for insurance. However, the decline
es which are indispensable for in claims during when we slowed our social lives might be a bal-
the insurance market will be- ancing factor in this respect.
come more diversified follow-
ing the pandemic. Assistance Slowdown of global trade has been another factor impacting the
services ranging from psycho- insurance market. Due to decelerating foreign trade activities,
logical consultancy to vehicle marine insurance branch is expected to shrink. These problems
maintenance or dental care, in trade activities will probably raise claims in credit insurance,
which are offered as additional too. Moreover, potential setbacks in the supply chain are expect-
services to insurance policies, ed to impose negative impacts on spare part costs, which will be
have brought many benefits to a serious concern for auto insurance. Experts refer to the impor-
policyholders during the pan- tance of 2020 and 2021 in terms of financial loss management
demic. Especially online med- for motor own damage and traffic insurance. They are warning
ical examination services of- that financial losses might even outpace physical losses, which
fered as a part of private health normally constitute the biggest cost item for those branches.
insurance policies have been The market is also contemplating on insurance pools which are
widely used by policyholders normally established due to the frequency of risks and size of
during the isolation days. As a losses. An article published by the reinsurance giant Munich Re
result, insurance companies are discusses the possibility of establishing insurance pools to ad-
expected to diversify such ser- dress the pandemic risk.
vices in the coming terms.

Huge amount of compensations could be Turnover reductions are expected

paid for travel health and organization According to a report named “Impact of COVID-19 on Different
insurance claims Categories in Turkey” which was published by Deloitte, insur-

ance is one of the markets that have experienced highly negative
impacts. The market is estimated to suffer from an interaction
Insurance market has faced huge amounts of compensation loss of 30 to 50 percent. The report states that tax, tender,
payments in certain branches. Many countries closed their bor- insurance and B2B portal interactions were observed to have
ders and limited air, land and sea travels during the pandemic, suffered from a sharp declining trend. Furthermore, a survey
which resulted in travel bans and restrictions. Nearly 4 million by KPMG called “Impacts of COVID-19 from the Perspective
policies are issued every year for travel health insurance which of the Business World” indicates that turnovers of insurance
is compulsory before travelling abroad, and over 20 thousand companies are expected to decline by 2 to 20 percent in 2020.
travel reservations are estimated to have been cancelled since