IIFC Day 1 - The insurance industry and its professionals have an instrumental role and facing the new and evolving risk landscape

14 November 2023 — XPRIMM Teams

Welcoming the professionals gathered at the International Insurance Fair and Congress’ second edition, İbrahim Temiz, Chairman of the Board of Directors for the organizing body, underscored the fair's pivotal role as a significant platform for all industry stakeholders. To illustrate the accuracy of this statement, the inaugural addresses delivered by Hakan Ülgen, President of the TOBB Aydın Chamber of Commerce, and Davut Menteş, the newly appointed President and ex Deputy Chairman of SEDDK (the Insurance and Private Pension Regulation and Supervision Agency) addressed the role of the market bodies in the insurance market’s development and pledged continued collaboration with all stakeholders and a commitment to contribute sensibly to the sector and the nation.

Davut Menteş pointed out the position of the supervising and regulatory body towards the current challenges the insurance market and society, in general, are facing: "The contemporary world confronts a spectrum of risks that differ from any previous era. Economic and geopolitical risks on one hand, and increasingly diverse environmental risks on the other, significantly impact our global landscape. Notably, climate change and its resultant catastrophic natural disasters, various accident risks stemming from urban concentration, and cyber threats permeating our lives through digital applications are illustrative examples. Global protection gaps become apparent in catastrophic risks, health, and cyber insurance domains. The substantial disparity between economic losses and insured losses places the burden on households, businesses, and the public. However, the escalating, diversifying, and intensifying nature of these risks is surpassing the capacity of these groups to cope. This underscores the crucial role of the insurance industry in providing protection against such risks. The realization of this need was reinforced following the earthquakes on February 6. While lost lives cannot be recovered, ensuring the continuity of social and economic life is imperative. In response, we promptly initiated collaborative efforts with all stakeholders in the sector post-earthquake. Recognizing our vulnerability to earthquakes, we revised our home insurance policies. Additionally, we are actively working towards the immediate implementation of mandatory disaster insurance, conceived as a comprehensive product covering non-earthquake natural disasters like floods, landslides, and forest fires, also encompassed in the OVP. Our focus is on safeguarding the rights and interests of insured individuals and private pension participants, fostering sectoral development, and establishing an efficient and trustworthy market order within a fair competitive environment. In alignment with this mission, our collaborative endeavors persist with all stakeholders."

Underlining that it is necessary to bring structural solutions to chronic problems with awareness of current and future risks, Menteş said: “We know that in order to make this possible, it is necessary for the sector to operate under transparent, predictable, accountable, comparable and fair competition conditions and to ensure market discipline. In this context, we are strengthening our institution's audit, surveillance and early warning systems with both human resources and technology day by day. On the other hand, we aim to make international financial reporting standards mandatory as of January 1, 2024, which has entered a new phase with the tests and pilot studies that we have been continuing for a while in financial reporting within the framework of compliance with international norms and which we will implement in the last quarter financials of this year. For this purpose, we are trying to complete the necessary regulations and technical tests as soon as possible. We continue our work in the areas of digital and green transformation included in the MTP, and in line with the developments in the world, we design the regulatory infrastructure that supports insuretech applications to also take into account cyber threats. In order to appeal to wider audiences in insurance and private pension products, we contribute to the participation finance law studies initiated within the scope of the MTP to realize the institutional transformation of the participation finance sector and to establish mechanisms to support the sector. We will also support projects to support Fintechs. I would like to state that we will make every contribution with all our efforts in the implementation of policies and measures on the complementary retirement system, the development of agricultural insurance due to climate change, long-term care insurance, building completion insurance, professional liability insurance, and holistic disaster insurance. "As Turkey's insurance authority, we will continue to support our country and our people in Turkey's new century vision with all our stakeholders and common sense," he said.

Shedding light on the significance of agencies during his opening speech, Hakan Ülgen, President of TOBB Aydın Chamber of Commerce, remarked, "The fair will delve into various issues, sparking conflicting ideas. However, moving forward, it is imperative to move beyond debates concerning the 1-2 percent commission rate for our agencies.” He firmly underlined that the existence of agencies, as a distribution force, is instrumental for the functioning of the insurance industry. “No matter how digitally advanced and globally accessible sectors become, we are destined for failure if we neglect individual relationships and the human element. Let us not inadvertently create artificial intelligence devoid of our humanity.” Digitalization is obviously necessary and provides multiple benefits to both customers and insurers. As such, the industry, as well as other economic and financial sectors in the country, will pursue it and stay abreast of developments without sidelining the human factor and its role in interacting with customers. “At TOBB (The Union of Chambers and Commodity Exchanges of Türkiye), our commitment persists in supporting our fair, industry, stakeholders, and agencies until the end."