Digital Insurance in Turkiye

I have been following the rapid developments in Digital Banking both in the World and in Turkey.

According to a news I read, the number of companies applying for a Digital Banking license in Turkey in the first months of 2023 reached 35.

What is Digital Banking? What kind of legislation does it have?

In the Regulation on the Operating Principles of Digital Banks and Service Model Banking published in the Official Gazette No. 31704 dated December 29, 2021;

“Digital bank: Credit institution that provides banking services through electronic banking services distribution channels instead of physical branches,”

It is defined as .

Digital Banks provide their services to their users over the internet, without having a physical branch.

The minimum paid-in capital amount required for the installation has been determined as 1 billion Turkish Liras, paid in cash, however, BRSA has the authority to increase this amount. Credit customers of digital banks can only consist of financial consumers and SMEs.

Some well-known Digital Banks serving abroad


Institutions that received digital banking operating permits in Turkey

-Hayat Katılım Bankası A.Ş.
-Kasa Katılım Bankası A.Ş.
-TOM. Participation Bank Inc.
-FUPS Bank A.Ş.
-Ziraat Dynamic

Enpara (QNB Finansbank) and CEPTETEB (Turkish Economy Bank) provide services through the licenses held by their traditional banks.

Although these companies have been given a digital banking license, there are no digital banks that have started operating yet. (As of 10.09.2023)

Based on the official definition of Digital Banking above, in international literature;

Digital insurance can be defined as “Online tools and platforms that use technology to improve internal operations while providing customers with efficient and personalized insurance services.”

Digital insurance solutions

It allows customers to carry out all their insurance transactions through digital processes.
It offers a user-friendly and personalized customer experience.
It simplifies policy administration, claims processing and customer service.
It increases operational efficiency with technology and data analytics, ensures faster transactions and reduces costs.
It helps insurance companies stay competitive by increasing customer engagement, brand loyalty and market share.

Digital insurance models offer speed, agility, easy accessibility and a user-friendly interface. This digitalization enables the creation and implementation of newer and better services.

Digital insurance service providers have the following differentiators:

-Customer first approach,
-An information source where potential customers can research and understand the brand without speaking to a representative.
-Insurance technology ecosystem where pricing, risk assessment and claims handling are done through open, connected software platforms,
-Insurance products that can be customized according to need
-Some companies operating in Digital Insurance in the world

Oscar Health,
Next Insurance,
Root Insurance,
Corvus Insurance.

Digital Insurance Examples in Turkey

As far as I can see, Turkcell Digital Sigorta A.Ş. It was established with a capital of 175 million TL.

Although Hepiyi Sigorta and, to some extent, Quick Sigorta, operating with their existing licenses, are companies that have made significant progress in this field, we are still at the beginning of the road in terms of both legislation and implementation.

I know that there are sub-applications in our large insurance companies, but there is no exact example that we can call Digital Insurance yet. (Note: If you have different projects, I would be happy if you share them with us in the comments.)

Benefits that digital insurance companies can obtain

Going Beyond Customer Expectations
Positive Consequences of Using Big Data
Reduced Costs
Better Employee Experiences
Leverage lower code capabilities instead of high Compute development costs
How to Implement Digital Insurance?

First of all, there is a need for legislation. Although we generally follow the legislation and practices in the digital world in our country, the legislation in this field abroad can be transferred in accordance with the conditions of our country, paving the way for digital insurance and providing guidance.

We can list the technological infrastructure that enables companies to be successful in digital insurance as follows:

Artificial intelligence
machine learning
internet of things
Big Data and Analytics
Software as a Service Features (SaaS)

Based on the definition of Digital Banking, SMEs and Individual customers as customer segments will be the target customers of Digital Insurance.

You may say that Digital Insurance as aggregator in Turkey was not as successful as it was once ambitious. This does not mean that it will not be successful eventually.

A process that starts today will provide an advantage over competitors. If we are not ready, an international company that is ready will eventually enter our market and be successful in this business.

Moreover, you can follow the development of classical insurance from the change in market shares in the last 10 years.

It is beneficial to try to adapt to the world and the age without resisting or wasting time.

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