Minister of Treasury and Finance Berat Albayrak has announced that a new Insurance Regulation and Supervision Authority (SDDK) will be set up to supervise the sector, raising expectations in the insurance industry.
Turkey Insurance Association President (TSB) Can Akin Caglar said that the establishment of the SDDK would expand the insurance industry.
“Legislative arrangements will be released much more quickly, and the market will be more driven in anticipation of expectations and needs.”
The president of an insurance agents' association, Mr Haci Ali Yucel, welcoming the establishment of the SDDK, noted that under the BRSA, a much healthier and stronger banking system has been established. He added, “The first step in the journey of a strong and healthy structuring of the insurance sector will be the establishment of the Insurance Regulation and Supervision Authority. We believe that a big breakthrough will take place.”
He said that there are many demands in the sector. He pointed out, "Compulsory insurance must be increased. All the assets of the state must be insured with private insurance. Mandatory traffic insurance must be arranged according to drivers, not vehicles.”
The SDDK is part of Turkey's "New Economy Programme Structural Transformation Steps 2019" announced last month, that promises structural reforms for the financial sector. Among these are:
- The private pension system will be restructured. An effective savings system will be created and a more sustainable pension system established.
- A Turkish reinsurance pool will be operational soon to facilitate access to insurance by businesses in "risky" industrial sectors such as chemicals.
The "New Economy Programme Structural Transformation Steps 2019" is a follow-up to the New Economic Programme launched in September 2018 laid the grounds for free market rules, a tight fiscal policy, sustainable growth, a fairer tax regime and the coordination of monetary policy with fiscal policy.
There are more than 60 insurance companies operating in Turkey, with foreign interests commanding around 70% of the market. Agents account for around 75% of sales. Currently, the Treasury oversees the insurance industry.