Page 11 - TurkinsuranceDigitalMagazine

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“Actuarial science is the

art of making uncertainty

measurable”

Taylan Matkap, President of Actuarial Society of Turkey: “In the
coming years, we will see a rapid increase in the number of projects
where doctors, sociologists, engineers and climate scientists work with
actuaries”

If you wish, we could start talking briefly about highly probable, high impact yet neglected threats-
the experiences of Actuarial Society of Turkey which was developed by the political analyst Michele
during the first half of 2020, when the impacts of Wucker after she was inspired by the Greek Financial
the pandemic were most severe. Could you please Crisis. Despite the fact that the World Health Organi-
tell us what did went through as the Association zation had published numerous reports estimating the
and how you managed it? potential risks that might be incurred by such a risk,
those reports had always been neglected. As a result,
As the Board of Directors, we determined some main we have faced the reality of how unprepared we were
principles for the COVID-19 environment and com- for the pandemic. Unfortunately, the world is currently
plied with those principles in the management of our displaying the same negligence about climate change.
Association. Our first priority where we made no com- Pandemic has posed negative impacts on the macroe-
promises was to ensure the safety of our working envi- conomic balances of countries and their medium-term
ronment and avoid activities that would endanger the targets on a global scale. Demand by the household
wellbeing of our members. In this respect, we activat- went down, together with the disruption of expecta-
ed our business continuity plan which was prepared tions, increasing uncertainty about the future, and
earlier, and carried our Board Meetings to the digital deformation of supply chains. It is estimated that it
platform, along with our usual works. In order to avoid would take at least 3 years for economies to return to
losing our communication efficiency, we have formed their status in 2019.
agile teams to manage interaction with the public au-
thorities, international organizations and our mem- Insurance market experienced the impacts of the pan-
bers for topics that closely interest the financial world demic from multiple angles due to the general trajec-
and insurance market. In that respect, we have taken tory of the economy and the increase in its internal
active role in the committees that were established risk factors. Models are generally built upon the as-
under the roof of International Actuarial Association sumption that the future will be similar to the past.
(IAA) – we are a full member since 2018. Last but not If the data you are using does not include big-impact
least, we have monitored the changes caused by the events such as pandemics, success of your model in
pandemic simultaneously on data level, and worked on estimating future risks will be limited. We have seen
them towards modeling behavioral changes. As we all this during the pandemic, and numerous organizations
know, the modern world had not experienced a period had to revise their models accordingly.
of such frequency in terms of behavioral changes.
Change of usual claims behaviors of insurance prod-
What were the negative impacts on the Actuarial ucts resulted in the change of liabilities for insurance
Society of Turkey? Have there been any delayed or companies. Loss frequency has increased in areas such
cancelled activities? as business interruption, loss of profit and cyber risks;
but, decreased in motor insurance since social life was
We could not organize most of our planned meetings. very limited for a certain time.
Moreover, in accordance with a decree by the Minis-
try of Internal Affairs about associations, we had to In countries where the share of motor insurance is
postpone our Ordinary General Assembly Meeting to considerably high in overall premiums, such as Tur-
an uncertain date in the future. key, this reflected positively on financial tables of
companies. Driven by the changing consumer behav-
How do you evaluate the impacts of the pandemic iors, use of private transport increased after the re-
on the insurance market both in local and global strictions were lifted, which was accompanied by the
dimensions? cost pressure on foreign exchange side. Main strat-
egies of insurance companies are still being shaped
It would be proper to explain the coronavirus and its around actions that aim to preserve the cash flow dur-
impacts through the Gray Rhino theory -the theory of ing the pandemic.