News Middle East16 Jul 2019

Turkey:New economic blueprint proposes measures to boost insurance

| 16 Jul 2019

An economic road map unveiled by the Turkish government last week includes several measures related to the insurance and pension sectors. The Eleventh Development Plan was submitted to the Turkish Parliament on 8 July after it had been approved by President Recep Tayyip Erdogan. The plan covers the years between 2019 and 2023, and serves as a guide to improving the Turkey's economy.

Insurance

Under the plan, the measures proposed for the insurance sector include:

  • Incentives will be granted to employers to encourage them to purchase group policies to expand supplementary health insurance.
  • The Turkish reinsurance pool will be launched.
  • Export support will be increased especially through insurance / guarantee programmes.
  • In agricultural insurance, the scope of products and risks to be covered will be expanded, and efforts will continue to promote insurance products that protect income.
  • Natural disaster insurance will be expanded and extended to cover all types of disasters, and mandatory earthquake insurance claims and payments will be monitored effectively.
  • The legislative framework and institutional structure will be developed to promote participation insurance that will be expanded to address all types of risks.
  • A participation reinsurance fund will be established in order to prevent the outflow of resources abroad.

Pension

Measures proposed for the private pension system (PPS) include:

  • The PPS will be developed to increase the number of participants, the duration of the members staying on with the pension fund and the amount of funds in the system.
  • State subsidies for the PPS will be differentiated by age, making the long-term savings attractive to the young.
  • In order to minimise early exits from the PPS by members due to their short-term cash needs, individuals will be given the opportunity to withdraw some of their savings, without leaving the system, to meet needs such as health, marriage, education and property ownership.

The economic development plan envisages that the country’s gross domestic product will increase to $1.08trn in 2023 while the income per capita target is $12,484. The government predicts annual real economic growth at 4.3% on average between 2019 and 2023.

 

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