News Middle East13 Mar 2019

Turkey:Insurance agencies pool resources to cut costs

| 13 Mar 2019

Several small insurance agencies have banded together to cut costs and avoid bankruptcy, according to Mr Resit Cakas, chairman of the Association of Insurance Agencies (SAB).

He said that some agencies had adopted measures such as a joint office or sharing staff among themselves so as to prevent closure, reported Insurance Gazette.

“We've been visiting agencies for a while. In general, there is hesitation about how the year 2019 will go, “ he said. “Some say they have to close their agency, they want to transfer their portfolios.”

He said that there is a danger of further reduction in the number of insurance agencies in the country.

He said that it was a shame that this was happening  given that insurance agencies contribute to significant employment in the country. He called for obstacles faced by insurance agencies to be removed. “Unfortunately, we have not yet been able to explain to the public administration how important we are as agents.”

He pointed out that the insurance agency could offer services which the bancassurance channel cannot directly offer. He said, “You cannot expect the officer in the bank that sold you your insurance to help you when there is any damage. But you can call the agency 24 hours a day, seven days a week. This is our profession.”

He said, “I don't see any significant incentive to help the agency system to develop....We feel isolated as a business. The authorities need to support us.” Already, the market share of the agency channel has fallen to 60% now, compared to 70% previously.

He suggested, for example, that a separate insurance supervisory body be set up, similar to the Banking Regulation and Supervision Authority (BRSA) for the banking sector.

Mr Cakas said that if such a structure was created and other changes made, investments in the Turkish insurance sector from abroad will increase.

The current insurance regulator is affiliated to the Ministry of Treasury and Finance.

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