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topic and touch on the current situation. I will proceed with five points:
1. Competitive Market and Premium Production: There are a total of 72 insurance companies, making the Turkish market quite competitive. There is a $14 billion GWP, and total premium production reached $34 million as of August 2024. There are a total of 16 million participants. Looking at the last decade, the last two years have been particularly successful in attracting new participants. As Mr. Uğur mentioned in his speech yesterday, 20% of the total gross domestic product comes from the sector, and a growth expectation of 34% is projected.
2. The Role of the Insurance Sector: The insurance sector holds a significant place in Turkey, as it does in global practice, because it provides financial protection to individuals and businesses. The point we need to focus on is risk reduction and management. Accurate analysis of risks and the actions to be taken in response are of great importance. Up until now, we have taken a reactive approach, meaning we were limited to compensating and making payments after the risk materialized. However, after the earthquake, it became clear that we need to adopt a proactive stance and focus on risk prevention. As a sector that builds the future, the insurance industry ensures the control of risks and offers great benefits through risk-sharing. In addition, it provides financial stability and security.
3. Savings and Supplemental Pension Insurance: Recently, regulatory authorities have been taking steps to increase savings in their economic policies. Structures that support the non-bank financial sector are being developed. An increase is also being observed in supplemental pension insurance. We are moving toward a system where employers themselves are included in the model alongside the mandatory component, which is a crucial development considering the aging population. Additionally, special attention should be paid to incorporating businesses with religious sensitivities into the takaful system.
4. Protection Gaps and Penetration Rate: Looking at protection gaps worldwide, there is a $1 trillion gap in pensions, $0.9 trillion in cybersecurity, and $0.8 trillion in healthcare. We are in a better position than the global average in pensions. In Turkey, cybersecurity remains a luxury service in terms of the protection gap. On the healthcare side, due to the state's significant responsibility, there is not much left for the private sector to handle. Globally, our penetration rate is 7%, well below the world average. However, significant progress has been made in recent years, especially from 2022 to 2023. In non-life premium production, we rose from 27th place in the world in 2022 to 20th place in 2023. In the EMEA region, we moved from 4th place to 1st.
5. Growth Potential and Goals of the Sector: The growth potential of the sector is quite high. The first goal is to raise awareness. The second goal is to review the structures within the sector and bring all stakeholders together. The third goal is to establish more effective relationships with public authorities and regulatory bodies. Officials in parliament do not fully understand the insurance sector, so we need to develop better dialogue with them. The fourth goal is to understand customers' needs and increase participation. It's no longer just about selling insurance, but analyzing what society needs and offering products accordingly.
The pension and insurance sector in Turkey has proven its resilience during challenging times. Now it's time for a breakthrough. The Insurance Association of Turkey (TSB) is determined to contribute to society and the economy with new goals. The insurance sector will be a significant force for both our country and other countries in the region.” |
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