Distribution Channels in Turkish Market
The main distribution channels in the Turkish insurance industry are agencies, banks (which are actually in agent status but demonstrated as a separate category due to their size), brokers, direct business of insurance companies, and other categories with small shares.
Agents historically dominate the market especially with their share in non-life more than half of the total market.
Banks are more aggressive in non-life insurance business lately, which ends up with a decrease of agents channel share from 60%s.
Banks have a near monopoly on life insurance. It is challenging for Life Insurance companies that do not have a bank distribution channel to grow profitably, especially in the field of credit life insurance.
Brokers are in general bigger in size and more professional compared to agents. Many global brokers are operating in the market , and some of them have higher business volume than many insurance companies. Yet, brokers are stuck around 15% share for many years.
Direct business is generally composed of patrimonial portfolios and some special risks
Although the number of B2C internet platforms (a type of aggregator) that sell insurance policies directly to customers through digital channels is also increasing, the expected or hoped-for sales volume has not yet been reached. The fact that the expected performance has not yet been realized does not mean that the situation will continue like this in the near future, because the internet usage rate in Turkey is over 85% and Turkey is among the top 10 in the world in terms of number and usage on many social media platforms. Moreover, after Generation Y, who is prone to internet and digital shopping, Generation Z is also gaining purchasing power.
The first Digital Insurance company was founded by Turkcell (the largest mobile operator in Turkey). Many new companies can be expected to be established very soon.(Table 1.3).
Table 1.3 Premium Split in Channel Basis
| Agents | Brokers | Banks | Direct | Other | |
| Non-Life | 57,35 | 15,32 | 14,89 | 8,78 | 3,66 |
| Life | 11,23 | 0,6 | 78,35 | 9,72 | 0,11 |
| Total | 49,59 | 12,84 | 25,57 | 8,94 | 3,06 |
Source: SEDDK (2021). Annual Report About Insurance And Prıvate Pensıon Actıvıtıes Retreived from https://www.seddk.gov.tr/upload/doc/2021-sigortacilik-ve-BES-faaliyet-raporu.pdf . December 10, 2022.
The Turkish insurance market is fragmented with a huge number of agents and a growing number of brokers. Entry barriers, although tougher in recent years, are low in the agency channel, and there are almost 16 thousand insurance agents competing with each other and other channels (Table 1.4).
Table 1.4 No. of Intermediaries in Turkish Insurance Industry
| 2019 | 2020 | 2021 | |
| Number of Agents | 15.942 | 16.346 | 16.751 |
| Number of Brokers | 146 | 152 | 164 |
| Pension Intermediaries | 51.149 | 68.015 | 69.251 |
Source: SEDDK (2021). Annual Report About Insurance And Prıvate Pensıon Actıvıtıes Retreived from https://www.seddk.gov.tr/upload/doc/2021-sigortacilik-ve-BES-faaliyet-raporu.pdf . December 10, 2022.