Turkiye: Entry of new insurance companies shows interest in sector
Source: Middle East Insurance Review | Dec 2022
Eight new insurance companies were established in Turkiye recently, indicating interest in the insurance sector, according to the Insurance and Private Pension Regulation and Supervision Authority (SEDDK) chairman Mehmet Akif Eroglu.
There are also several licence applications in the pipeline, and that licensing work is continuing, said Mr Eroglu.
As of today, there are 70 companies actively operating in the Turkish insurance and pension sector, 45 of which engage in non-life business, 21 are in life insurance and pensions, and four are reinsurers.
The Turkish insurance sector lags behind the economy, he said. While the Turkish economy is in the top 20 in the world, the insurance sector ranks the 42nd biggest globally in terms of premium volume in 2021.
The Turkish market focuses on growth and increasing the penetration rate because it has enormous potential, according to Mr Eroglu. Four out of five households do not have home insurance. Three out of four vehicles are without insurance. In addition, 50% of SMEs in Turkey lack insurance. The national earthquake insurance scheme DASK has a penetration rate of around 50%.
He said, “We are far behind developed countries in terms of penetration. As the regulator, we monitor the penetration rate separately for non-life and life business. While the world average is 3.8% excluding life, this rate is 1.44% in Turkey. While the penetration rate in the life branch is 0.47%, the world average is around 3%.
“The Turkish financial system is dominated by banks. Although the insurance-pension sector ranks second, the gap is huge. We are trying to change that image as well.” M