Page 7 - Turkinsurance Digital Magazine

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Trend of digitalization will

continue non-stop even after the

pandemic is over

Aslıhan Duymaz, Director of Financial Services Consultancy at KPMG

Turkey: “Covid-19 has taught us an important lesson about being
prepared for unexpected events”

World is facing a pandemic. How is it affecting the ed to experience the deepest impacts. This is due to
global insurance business? decreasing incomes as a result of the impacts of the
pandemic on financial markets such as fluctuation and
Covid-19 is deeply impacting the insurance market, uncertainty, and of course, high death and disability
just like most other markets. As the pandemic has sev- rates in certain countries. As life insurance in Tur-
eral impacts on many areas of people’s lives, insurance key is mainly driven by credit life insurance products,
market has been showered with demands by individu- premium production might see an increasing trend de-
als who have bought their services. Policyholders want pending on the increase of credit usage. Individuals
to know the coverage of their policies in detail. And may become more conscious about their own require-
due to the complicated structure of insurance market, ments in a short while. Critical illnesses may result
it would be better to make assessments by considering in a demand growth for disability and life insurance
the risk factor. products; however, this will also depend on the social
structures of countries.
Impacts on life insurance are limited. Especially
SARS pandemic in 2003 was a big experience on a How do you evaluate the impacts of pandemic on
global level, and insurance markets had already added insurance market in our country?
some limits in contract terms and conditions concern-
ing the pandemic situation. However, indirect impacts Coronavirus pandemic, which began to impact global
of the pandemic might still be experienced in credit economy as of December 2019, started to show its
insurance and employer liability insurance. Plus, there negative impacts on our country as of March 2021.
are several cancelled events all around the world. Can- According to the statistics announced by the Insur-
cellation of big events appealing giant masses such ance Association of Turkey, insurance market grew by
as Champions League or Tokyo Olympics resulted in 24.8 percent in the first quarter, which was a decline
huge losses for the market. We are expecting premium by approximately 5 points compared to the growth of
production to decrease in certain branches due to the 29.9 percent in the first two months of 2021.
pandemic, especially in travel and motor own damage
insurance. As the pandemic has influenced the entire world, many
insurance companies announced that all medical costs
We have been observing different impacts on health of policyholders will be covered by health insurance
insurance depending on the country, policy coverage policies until they are diagnosed positive for Covid-19.
and health policies of governments. During the pan- The demand for insurance policies grew in parallel
demic, there have been insurance companies that sid- with the increase in the importance attached to hu-
ed with policyholders and paid for their treatment ex- man health. Like the rest of the world, digitalization
penses even though pandemic was not a covered risk, has gained additional significance and the process for
and issued special products for pandemic such as some digitalization has been accelerated. We believe that
companies in Italy. digitalization will decrease some costs, thus reflecting
positively on the insurance market.
In addition to main threats posed by the virus on hu-
man health, health insurance is also impacted by med- How long do you think these factors will continue
ical conditions resulting from immobility and depres- to impact the insurance market? Could you share
sion, as people have had to stay at their homes. We your estimations for Turkey and the rest of the
see that this factor also increases losses and creates a world?
trend of loss in life insurance as well.
The process we are still going through is full of quite
Subject to every country’s own circumstances, life in- different impacts. We believe it is still early to say
surance, annuities and pension products are expect- when the insurance market can recover in general, and