Fierce competition, persistent inflation and the rise of electric vehicles are reshaping Turkiye’s motor insurance market. To stay ahead, motor insurers are leveraging data platforms and fraud-detection tools, says Turkish Motor Insurers Bureau’s Mr Bulent Karan.
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.
Speaking to Middle East Insurance Review, Turkish Motor Insurers Bureau Managing Director Bulent Karan said MOD, commonly known as casco insurance, remains one of the Turkish insurance market’s flagship branches.
Although the rapid expansion of health insurance has pushed casco motor insurance down the industry premium rankings over the past two years, Mr Karan said 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
Mr Karan said 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.
Claims inflation has consistently outpaced consumer inflation over the past five years. Between 2020 and 2025, cumulative claims inflation in Turkiye exceeded cumulative consumer inflation by about 1.3 times, compared with less than 1.2 times across the European Union.
At the same time, limited real premium growth over the past two years reflects heightened price competition and more relaxed underwriting practices among some insurers seeking market share.
Profitability supported by underwriting discipline
Despite inflation and currency volatility, Mr Karan described the casco motor insurance branch’s ability to remain profitable as a “success story”.
According to data released by the Insurance Association of Turkiye, the combined ratio in casco car insurance 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%.
Mr Karan said insurers with strong actuarial capabilities and advanced technology platforms have been able to price risks more accurately and improve underwriting performance, with industry loss ratios falling to around 70% in 2025.
However, the improved profitability has also attracted greater competition, with smaller insurers prepared to accept thinner technical margins to expand their market presence.
Growth opportunities remain
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.
He said Turkiye’s vehicle fleet has expanded by more than 40% over the past five years to 34.5m vehicles, while the average vehicle age has gradually declined, “creating additional opportunities for policy growth”.
EVs reshape underwriting and claims
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.
Mr Karan said insurers are increasingly introducing dedicated EV insurance products but continue to face challenges due to the limited historical claims data available for actuarial modelling.
Claims handling processes are also evolving, requiring specialised towing procedures and mandatory observation periods after accidents to monitor potential battery fires.
Claims service key to customer loyalty
At the same time, customer purchasing decisions are increasingly centred on premium affordability and claims service quality, Mr Karan said.
“Given Turkiye’s relatively low insurance penetration and premium per capita of about $350, insurers with strong brands, financial strength and high customer satisfaction enjoy a competitive advantage,” he said.
Meanwhile, insurance fraud continues to pose challenges for the industry.
He said the real-time registration of motor policies through the SBM has significantly reduced fraudulent claims involving policies purchased after accidents have occurred. Insurers also conduct their own investigations into suspicious claims, while the Insurance Fraud Bureau (SISEB) works with the industry to monitor irregularities and strengthen fraud prevention efforts.
Leveraging technology
Emphasising 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%.”
Autonomous Emergency Braking systems, now required under the EU’s General Safety Regulation II, could reduce rear-end collisions by up to 50%,” 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, he said. M
| Casco motor insurance analysis for 2025 with data from the Insurance Association of Turkiye
In 2025, the total premium production of the 36 companies selling casco motor insurance reached TRY142.3bn ($3bn).
Including investment income, recourse and salvage income, the technical income of the 36 companies amounted to TRY159.2bn. When considering only premium income and claims/expenses without investment income, the technical profit was TRY14.9bn.
Insurers made claims payments totalling TRY80.7bn in 2025. When outstanding claims provisions and IBNR (technical reserves set aside by companies) are included, the net claims amount reached TRY84.9bn.
In 2025, companies incurred TRY127.3bn in expenses, including agency commissions and operating expenses.
After deducting TRY127.3bn in technical expenses from TRY159.2bn in technical revenue, insurance companies earned TRY31.9bn in technical profit from casco motor insurance last year.
If there were no investment income, 19 motor insurers could cover their expenses solely with premium income, while 17 companies would incur losses. Even with investment income, 11 companies reported technical losses from motor insurance in 2025. M
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