Turkiye’s motor own damage (MoD) insurance market continues to demonstrate resilience despite persistent inflation, intense price competition and evolving vehicle technologies, with most insurers adapting through stronger underwriting, technology investments and product innovation. Mr Bulent Karan says that MoD remains one of the Turkish insurance market’s flagship branches.
Although the rapid expansion of health insurance has pushed MoD down the industry premium rankings over the past two years, Mr Karan believes this should not be interpreted as a structural weakening of the segment. “Casco has served as a cornerstone product for both retail and corporate segments for many years”, he said, noting that it had accounted for between 15% and 22% of the industry’s total premium income over the past decade.
Competition remains fierce, with more than 30 insurers underwriting MoD business, of which 22 companies each hold a market share of more than 1%. The widespread use of brokers and agents, who typically work with multiple insurers, allows customers to compare quotations easily, further intensifying pricing competition.
Facing a competitive market, insurers benefit significantly from Turkiye’s Insurance Information and Monitoring Centre (SBM), according to Mr Karan. Access to historical vehicle claims data through SBM has markedly improved risk assessment and underwriting accuracy.
Inflation continues to drive premiums. General Director of the Turkish Motor Insurers Bureau noted that premium growth in Turkiye has been largely driven by inflation rather than genuine market expansion. Nominal premium growth of 32% in 2025 translated into almost no real growth after adjusting for inflation, with the last meaningful increase in real premium volumes occurring in 2023. Inflation has also driven up vehicle values and repair costs, making it difficult to assess pricing trends based solely on premium movements.
Profitability is being supported by underwriting discipline. Despite inflation and currency volatility, Mr Karan described the MoD branch’s ability to remain profitable as a “success story”. According to data released by the Insurance Association of Turkiye, the combined ratio in MoD remained below 100% in recent years. It stood at 97.6% last year, following 2024’s 94.8% and 2023’s 85%. However, in 2021 and 2022, it exceeded 100%.
While casco penetration remains below Western European levels, Mr Karan believes the market still offers significant growth potential. “Penetration currently stands at around 37% among passenger cars and approximately 34% after excluding tractors and motorcycles from the national vehicle fleet. Insurance uptake reaches about 80% for vehicles aged up to five years and around 50% for vehicles between six and 10 years old”, he said.
According to him, Turkiye’s vehicle fleet has expanded by more than 40% over the past five years to 34.5 million vehicles, while the average vehicle age has gradually declined, “creating additional opportunities for policy growth”.
Electric vehicle (EV) adoption is accelerating rapidly in Turkiye, with annual EV sales reaching about 190,000 units by the end of 2025, equivalent to 17% of total vehicle sales and broadly in line with European Union levels. The growth is expected to reshape underwriting and claims management, particularly as Turkiye develops both its EV manufacturing sector and domestic electric vehicle production.
At the same time, customer purchasing decisions are increasingly centered on premium affordability and claims service quality, as Mr Karan said. “Given Turkiye’s relatively low insurance penetration and premium per capita of about USD 350, insurers with strong brands, financial strength and high customer satisfaction enjoy a competitive advantage”, he explained. Meanwhile, insurance fraud continues to pose challenges for the industry.
Emphasizing the changing nature of automotive risk, he added that insurers should prepare not only for EVs but also for the wider adoption of connected and autonomous vehicle technologies. “Advanced technologies such as LiDAR sensors and cameras can significantly increase repair costs when damaged, while Advanced Driver Assistance Systems (ADAS) are expected to reduce accident frequency by as much as 30%”, he said. However, with Turkiye’s vehicle fleet averaging more than 14 years old, the benefits of these technologies may not be fully reflected in industry claims experience for another five to 10 years”, Mr Karan added.
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