Turkey's insurance market needs to expand in order to reach a position commensurate with its status as the world's 20th largest economy, according to Mr Turker Gursoy, president of the Insurance and Private Pension Regulatory and Supervisory Agency (SEDDK).
Currently, the Turkish insurance market ranks 39th in the world in size and 70th in terms insurance penetration. These data show that a very big insurance gap exists, reported Finans Gundem, quoting Mr Gursoy.
He cited participation insurance (ie, takaful), health insurance, private pensions and financial lines as areas with potential for huge growth.
Commenting on the work of the SEDDK, Mr Gursoy stated that the regulator aims to promote innovation facilitated by digitalisation and technology, resolve current problems in the sector, pass regulations, maintain a dialogue with stakeholders, and keep communication channels open.
A current example is a new regulation drafted by the SEDDK that would set up the legal framework for the basis of calculating the compensation amount in third-party motor insurance. The draft was scrutinised and passed last week by the justice committee of Turkey's Parliament.
The SEDDK is also working to widen participation in the voluntary individual private pension system (PPS). Mr Gursoy said, “One of our tasks in this context will be to remove the obstacles to the participation of citizens under the age of 18 in the system.”
In March, Turkish President Recep Tayyip Erdogan announced that the PPS would be expanded to include children under the age of 18, who constitute 25% of the population.
In another initiative, the SEDDK will pave the way for the transfer of pensions from organisations that provide pension services to their members—such as foundations and funds—to the PPS.
Mr Gursoy said, “With these approaches, we aim to develop private insurance and new domestic savings mechanisms.”
He added that while clear figures could not be furnished at present, estimates are that the pension reforms would lead to additional fund inflows of approximately TRY50bn ($5.8bn) to the PPS over the next 10 years.