TURKISH INSURANCE INTERMEDIARIES NUMBER OF EMPLOYEES ARE DECREASING BUT TOTAL COSTS ARE RISING

/in /by

*Agencies + brokers

Source: TUIK

TURKISH INSURANCE INTERMEDIARIES NUMBER OF EMPLOYEES ARE DECREASING BUT TOTAL COSTS ARE RISING – 1

All commercial enterprises have to closely monitor their costs in order to maintain their profitability and  compete effectively. Recent years insurance intermediaries are struggling with tougher competition and harder market conditions and also trying to cope with the rising costs. Between 2014-2018 number of intermediaries, number and cost of their employees, annual general expenses are as follows:

 

  2014 2015 2016 2017 2018
Number of intermediaries* 14.748 14.007 14.723 14.211 14.683
Annual average number of employees 44.758 39.968 35.424 37.930 38.689
Personnel
cost** x 1000 ₺		 1.055.920 1.019.058 1.070.140 1.337.846 1.441.097
Purchase of
goods and services x 1000 ₺		 1.049.862 1.216.948 1.141.475 1.207.057 2.053.822
Total cost x 1000 ₺ 2.105.782 2.236.006 2.211.615 2.544.903 3.494.919

Source, TUIK

*Agencies + brokers

**Gross

 

Comparison between 2014 and 2018;

2014 2018 RATIO
Number of intermediaries* 14.748 14.683 -0,4%
Annual average number of employees 44.758 38.689 -13,6%
Personnel
cost x 1000 ₺		 1.055.920 1.441.097 36,5%
Purchase of
goods and services x 1000 ₺		 1.049.862 2.053.822 95,6%
Total cost x 1000 ₺ 2.105.782 3.494.919 66,0%
Annual total cost per intermediary x 1000 ₺ 143 238 66,7%

*Agencies + brokers

The number of intermediaries from 2014 to 2018 were almost the same. Total costs rised 36,5% despite the number of employees decreased by 13.6%. In this period expenses  also increased  66%.

So, quick and effective precautions have become  necessity to cope with rising costs. First of all, intermediaries have to review their methods and processes  thoroughly. For this purpose they should utilize  knowledge and experiences of their stakeholders and everyone who can assist. Consequently, created innovations should be implemented fast and effectively

Thus, the new structure will  reduce costs, rise the competitiveness and help them to grow.

Rıza Oygur

January 2020