The supply problem in compulsory motor third-party liability insurance, also called traffic insurance, has been largely overcome, according to Mr Ahmet Yasar, president of Maher Holding Insurance Group.
He said, “As of today, we believe there is no longer a supply problem in traffic insurance. Of course, this isn't just a matter of a few companies; the increase in the number of players entering the market in recent months is encouraging.”
However, he added, problems in the traffic insurance branch have not completely gone away, particularly as cost challenges persist.
He said that free tariffs are one of the most talked-about topics in the sector. Insurers are struggling due to the lack of adequate control over costs. "When we talk about free tariffs," he said, "our citizens think insurance companies want to set their own prices. But that's not the case. Our primary goal is to manage costs and avoid losses."
Comprehensive motor insurance
Mr Yasar said new products have been introduced to increase insurance coverage in the sector. He said, "The insurance rate in comprehensive insurance is currently around 25%. We're working to increase this rate by developing new products.”
He noted that comprehensive motor insurance premiums have recently dropped below traffic premiums, highlighting the impact of competition on this issue. "In the past, comprehensive insurance premiums were two or three times the traffic premium. Now, the opposite is true—comprehensive insurance premiums can sometimes be half the traffic premiums," he said.
He said that competition, including the desire of new entrants to capture market share, plays a significant role in this development. Comprehensive motor insurance is a highly profitable branch, which whets players' appetite.
Furthermore, the exchange rate, which has turned relatively stable, may have also impacted prices.
He cautioned, “We are going through a period in which we need to be cautious on the comprehensive insurance side. Any potential cost increases in the coming period should be factored into pricing."
Traffic insurance is the largest branch in Turkiye, with premiums generated of TRY171bn ($4.1bn) in the first seven months of this year. This represented 25.5% of the insurance market’s total premiums of TRY669bn over the period.