Transcript PowerPoint Sunusu

TURKISH INSURANCE
SECTOR
October 2011
1
ASSOCIATION OF THE INSURANCE AND
REINSURANCE COMPANIES OF TURKEY

The Association of the Insurance and
Reinsurance Companies of Turkey is a
specialist
institution
with
the
characteristics of a unique nongovernmental institution operating under
Insurance Law No. 5684.

All local or foreign insurance and
reinsurance companies operating in
Turkey are members of the Association.
As of October 2011, the Association has
a total number of 66 members, 64 of
them being insurance companies and the
remaining
2
being
reinsurance
companies.
2
COMMITTEES OF THE ASSOCIATION
The Association established the following
committees to facilitate the preparation and
revision of all legislation, tariffs, working
guides and general clauses relating to insurance;
to foster the insurance sector and to conduct
studies and research on sectoral problems:
Fire Insurance
Marine Insurance
Casualty Insurance
Non-life Claims
Engineering Insurance
Life Insurance
Risk Engineering
Health Insurance
Liability Insurance
Agriculture Insurance
Financial & Accounting
Law & Legal Protection
AML/CFT
Actuary
3
INTERNATIONAL MEMBERSHIPS
• CEA, The European Insurance and Reinsurance Federation
www.cea.eu
• IAIS, International Association of Insurance Supervisors
www.iaisweb.org
• IMIA, International Association of Engineering Insurers
www.imia.com
• IUMI, International Union of Marine Insurance
www.iumi.com
• ICC, International Chamber of Commerce
www.iccwbo.org
• FALIA, The Foundation for the Advancement of Life & Insurance www.falia.jp
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TURKISH INSURANCE
SECTOR
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TURKISH ECONOMY IN 2010

National Income:
 GDP: 1.105 Billion TL (736 Billion USD)
 GDP per capita: 10.079 USD

Inflation:
 CPI (consumer price index): 6.40 %
 PPI (producer price index): 8.87 %

Unemployment: 11.4 %
6
WORLD INSURANCE SECTOR & TURKEY
(2010)

Total premiums: 4.3 Trillion USD (2.7 % increase)

Premium size in:




Developed countries: 3.69 Trillion USD
Developing countries: 650 Billion USD
Turkey: 9.4 Billion USD
Real increase (inflation-adjusted):
 Developed countries : 1.4 %
 Developing countries : 11 %
 Turkey: 4.8 % (in terms of USD)
WORLD INSURANCE SECTOR & TURKEY
(2010)

World premiums in percent of GDP : 6.9%






Developed countries:
Developing countries:
United Kingdom :
USA :
Turkey:
8,7 %
3%
12,4 %
8%
1,3 %
World premiums per capita: 627 USD





Developed countries :
Developing countries:
United Kingdom :
USA:
Turkey:
SOURCE: Swiss Re, Sigma No: 2/2011
3 528 USD
110 USD
4 497 USD
3 759 USD
128 USD
EU INSURANCE SECTOR AND TURKEY
(2010) ($)
Premium
Production
(Million $)
Real
Premium
Increase
(%)
Premiums in
% of GDP
Premium
Prod. per
Capita ($)
UK
310 022
- 2.6
12.4
4 497
France
280 082
2.1
10.5
4 187
Germany
239 817
3.8
7.2
2 904
Netherlands
97.057
- 2.9
12.4
5 845
Poland
17 763
2.6
3.7
466
Czech Rep.
7 914
- 3.6
4.0
753
1 482 347
1.9
8.1
2 736
9.429
4.8
1.3
128
EU-27
TURKEY**
Data related to premiums are taken from Swiss Re, Sigma No: 2/2011.
TURKISH INSURANCE SECTOR
INSURANCE AND REINSURANCE COMPANIES
As of October 2011, the Association has 66 members. Out of these 64
companies, 64 are insurance (11 life, 14 life and pension and 39 non-life
companies )and remaining 2 are reinsurance companies.
INSURANCE AND REINSURANCE COMPANIES
2006
2007
2008
2009
2010
Insurance companies
53
56
59
58
62
Life
21
21
23
22
24
Non life
32
35
36
36
38
Reinsurance companies
2
2
2
2
2
TOTAL
55
58
61
60
64
WORKING AREA
10
EMPLOYMENT IN INSURANCE AND
REINSURANCE COMPANIES
As of the end of 2010, the number of people employed in the
insurance sector is 16.568.
Employment in Insurance and Reinsurance Companies
Year
2006
2007
2008
2009
2010
No. of
Employed
13 550
14 950
16 007
18 841
16 568
Around 16.000 agents, 89 brokers and 1.072 loss adjusters operate in Turkish
insurance market.
11
PREMIUM PRODUCTION (2006 – 2010)
($)
12
PREMIUM INCOME ACCORDING TO THE BRANCHES ($)
Branches
Accident
Sickness
Land Vehicles
Railway Rolling Stock
Aircraft
Ships
Good in Transit
Fire and Natural Forces
Other Damage to Property
Motor Vehicle Liability
Aircraft Liability
Liability for Ships
General Liability
Credit
Suretyship
Miscellaneous Financial Loss
Legal Expenses
Assistance
Non Life Total
Life
Total
2010
(USD)
397.424.366
1.132.570.860
2.069.797.633
452.138
31.543.387
71.632.338
198.302.139
1.314.968.772
659.618.242
1.690.840.817
33.374.962
361.284
217.472.793
21.149.942
10.918.568
56.254.508
28.664.055
93.677
7.935.440.481
1.448.459.228
9.383.899.709
Percentage
Breakdown
(%)
Annual
Changes
(%)
4,24
12,07
22,06
0,00
0,34
0,76
2,11
14,01
7,03
18,02
0,36
0,00
2,32
0,23
0,12
0,60
0,31
0,00
84,56
15,44
100,00
14,96
23,82
21,65
357,42
-14,87
-1,52
18,71
6,45
12,85
18,74
9,62
49,25
33,96
18,08
1,50
33,10
20,86
0,00
17,21
24,01
18,21
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TOP TEN INSURANCE COMPANIES
(2010)
Rank
Non-life Companies
1
Axa
12,71 Ziraat Hayat ve Emeklilik
27,59
2
Anadolu
11,89 Anadolu Hayat Emeklilik
16,38
3
Allianz
8,33 Garanti Emeklilik
4
Ak
7,41 Halk Hayat ve Emeklilik
6,48
5
Yapı Kredi
6,35 AvivaSA
5,70
6
Gunes
6,17 Yapı Kredi Emeklilik
5,03
7
Groupama
5,81 Finans Emeklilik ve Hayat
3,91
8
Ergo
5,81 Vakıf Emeklilik
3,82
9
Eureko
5,18 Allianz Hayat ve Emeklilik
3,41
10
Mapfre Genel
3,45 Deniz Emeklilik ve Hayat
2,77
Top Ten Companies
Market
Share (%)
Life Companies
73,09 Top Ten Companies
Market
Share (%)
10,74
85,83
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DISTRIBUTION CHANNELS
(2010)
15
TOTAL PREMIUM PRODUCTION
IN % OF GDP
2,00%
1,50%
1,18%
1,27%
1,28%
1,24%
1,29%
1,28%
2009
2010
1,00%
0,50%
0,00%
2005
2006
2007
2008
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TOTAL PREMIUM PRODUCTION PER CAPITA
($)
17
PROFITABILITY, ASSETS AND EQUITY
(USD)
2010
Ratio
(%)
2009
Ratio
(%)
Financial Profit
59.701.715
0,64
Balance Sheet Profit
(After Tax)
78.013.519
0,83
295.782.407
3,71
Shareholders Equity
4.766.970.772
1,64
5.727.972.521
5,16
24.337.101.552
0,32
20.295.217.560
1,46
Total Assets
247.753.286
3,11
Financial profit ratio= financial profit / gross premium
Balance sheet profit ratio = balance sheet profit / gross premium
Equity ratio = equity profit / total equity
Asset ratio = balance sheet profit / total assets
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PRIVATE PENSION SYSTEM FIGURES
(USD)
2007
Number of
Participants
2008
2009
2010
1.457.704
1.745.354
1.988.322
2.274.293
Total Amount of
Contributions
3.330.429.174
3.575.760.749
4.660.445.382
6.271.221.838
Total Invested
Amount
3.219.635.401
3.455.762.697
4.507.836.732
6.076.968.255
Total Amount of
Participants
Funds
3.891.433.755
4.167.651.967
5.950.553.583
7.922.109.869
Technical Profit
-103.192.281
1.541.282
7.141.094
37.461.740
Total amount of contributions refers to the amount paid by the participants
Total invested amount refers to the amount paid by the participants minus management
expenses
Total amount of participants funds refers to total amount of the contribution of the
participants and their investment yields
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MOST ATTRACTIVE SEGMENTS IN FUTURE

General liability insurance


Mortgage insurance:



products should be more customer-focused
new system (legal background established in 2007)
new insurance products are expected to be introduced
Unemployment insurance:


becomes more important in times of global financial crises
Unemployment insurance products are widespread in countries like the UK,
Netherlands, Italy, Spain, etc. These products are expected to be more widely
demanded in the Turkish market in the near future.
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SWOT ANALYSIS OF THE SECTOR
STRENGTHS
strong legislative framework
human resources
experience with crises
growth potential
knowledge
good relations with public authorities
OPPORTUNITIES
WEAKNESSES
price competition
reputation problems
deficiencies in publicity
sale skills
low technical profitability
THREATS
low penetration level
need for new products
optimization of distribution channels
conservation
shrinking economy
contraction in the reinsurance market
increasing earthquake risk
cost controls
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DEVELOPMENTS IN THE
EU HARMONIZATION
PROCESS
CURRENT STATUS OF THE
NEGOTIATION PROCESS WITH THE EU
The screening process under Chapter 9, “financial
services” (the chapter including insurance) has been finalized;
HOWEVER
following the recommendation of the EU Commission, the EU Council
decided to suspend negotiations with Turkey under 8 chapters, one of
which is “financial services”. This has brought the process to a major halt.
The Turkish insurance sector, on the other hand, has accelerated the
harmonization process unilaterally. There has been significant progress in
the area of insurance and supplementary pensions and the Turkish
insurance sector is to a great extent in harmony with the EU insurance
acquis.
LEGISLATIVE
DEVELOPMENTS
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Turkish Insurance Law

“Turkish Insurance Law” enshrines 12 chapters and 47 articles.

All insurance and reinsurance companies operating in Turkey,
the Association of the Insurance and Reinsurance Companies of
Turkey, intermediaries, actuaries and insurance experts are
subject to this law.

Turkish Insurance Law was approved on June 3, 2007 at the
General Assembly of the Turkish Parliament and published in
the Turkish Official Gazette (No: 26552) on June 14, 2007.
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Turkish Commercial Code &
Code of Obligations

The new Turkish Commercial Code was recently enacted. The new
Turkish Commercial Code introduces important novelties in the field
of consumer protection, categorization of insurance classes,
information society, etc. The Code will enter into force by July 2012.

The new Code of Obligations was recently enacted. The code which
regulates obligations between legal and natural persons and contains
provisions relating to insurance sector will enter into force by July
2012.
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Draft Law on Catastrophe Insurances

Another important legal development in the Turkish insurance
market is the Draft Law on Catastrophe Insurances.

The Draft Law not only foresees the extension of the penetration
level for compulsory earthquake insurance through new measures
but also the completion of legislative and technical infrastructure
work for the extension of the Turkish Catastrophe Pool (TCIP)
indemnity to cover all natural catastrophes (flood, landfall, storm,
avalanche, hail), environmental pollution and terrorism.

The draft Law is still pending.
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Draft Law Amending the Motorways Traffic
Law No. 2918

Draft Law Amending the Motorways Traffic Law No. 2918, which
is prepared in line with EU standards, envisages the introduction of
new traffic measures.

The Association of the Insurance and Reinsurance Companies of
Turkey has formulated the views of the insurance sector on the
Draft Law, specifically on measures relating to compulsory third
party liability insurance.

The Draft Law also empowers the Association to authorize “special
experts” to intervene traffic accidents with material damages. After
the coming into force of the Law, traffic police will only intervene
such accidents when traffic security necessitates.

The draft Law is still pending.
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OTHER
DEVELOPMENTS
Solvency II

In Turkey’s EU harmonization process, the Turkish insurance
sector has been working on the implementation of Solvency II.

Within this context, a “Specialized Committee on Solvency II” was
established in accordance with Art. 33 of the Turkish Insurance
Law No. 5684.

A sample of ten insurance companies were determined to conduct
Quantitative Impact Study 4 (QIS 4), which had previously been
conducted by the European Commission in the EU countries. QIS 5
was also started to be applied from December 2010.

The Solvency II Directive was also translated into Turkish and
distributed to companies by the Association.
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Studies for the Development of Life Insurance

The portfolio of saving life insurance intends to decline due to the
private pension system.

The portfolio structure of life insurance is mainly comprised of life
insurances related with credit.

In this context, a study was prepared by the Association on the
development of life insurance and it was submitted to the
Undersecretariat of Treasury.

The studies on the development of life insurance, especially the
annuities, will continue.
Mortality and Morbidity Tables

The study on Mortality and Annuity Table of Turkey” initiated in
2009 by the Undersecretariat of Treasury and conducted with
Hacettepe and Marmara universities under coordination of
Insurance Information Center was completed in June 2010.

The results of the mortality and morbidity study which was
conducted to examine the sickness and death rates in Turkey were
introduced to the insurance sector.
ASSOCIATION’S
SUBSIDIARIES
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ASSURANCE ACCOUNT

Assurance Account was founded within the body of the Association of
the Insurance and Reinsurance Companies of Turkey as per article 14
of the Insurance Act 5584 dated June 14th 2007.

Assurance Account meets medical treatment expenses of those who
suffer bodily injuries (such as injuries, disabilities and death) under any
coverage provided under compulsory insurances, and pays disability
indemnities to those who become disabled due to such accidents and
also death benefits to dependents who have been deprived of the
deceased’s support in case of death.
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INSURANCE INFORMATION CENTER


The Insurance Information Center was established in August 2008
within the Association. The Center is responsible for collecting data on
life, health, traffic and compulsory insurances including compulsory
liability insurance on medical malpractice; achieving consistency in
insurance practices; realizing sound pricing; preventing fraudulent
activities and developing reliable statistics.
The Center comprises four sub-information centers, namely, TRAMER
(Traffic Insurance Information Center), SAGMER (Health Insurance
Information Center), HAYMER (Life Insurance Information Center)
and HATMER (Insurance Loss Pursuit Center). Through TRAMER, it
has become possible to issue on-line real time motor third party liability
insurance policies.
35
INSURANCE ARBITRATION COMMISSION

Insurance Arbitration Commission was established within the Association
for the resolution of disputes between insurance companies and the
insureds. As of August 2009, the Commission has started to accept
complaints.

Insurance Arbitration Commission, composed of 48 member companies,
has 123 arbiters working in non-life branch and 14 arbiters in life branch.

As of 2010, 1.133 applications have been made to the Commission. 1.063
of them belong to non life insurance branches and 70 of them to life
insurance branches. 614 of the applications have been concluded and 519
of them are still in process.

% 83 of applications belong to real persons, % 17 of them to legal persons.
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INSURANCE TRAINING CENTER
Insurance Training Center (SEGEM) was established to enable the
holding of necessary examinations on specific topics related to
insurance in an impartial manner and to meet training demands both at
home and abroad and within the framework of international
agreements.
 SEGEM held the training on Agency Technical Personnel for nearly
40.000 candidates last year.


Nearly 10.000 people applied for the expert training.

163 people applied for the actuarial examinations.

5.700 people applied for the training of trainers.
37
TURKISH MOTOR INSURANCE BUREAU

Turkish Motor Insurance Bureau, in the frame of Civil Liability
Insurance
regarding the use of motor vehicles
in countries
participating in the Green Card System where the insured vehicle
circulates, was founded based on the Regulation regarding working
methods and principles of the Turkish Motor Insurance Bureau which
was published in the Official Journal dated 28.06.2008 with number
26920 and based on article no:24 of the Insurance Law to issue
internationally valid documents and provide settlement for
damages caused in that regard and to handle and settle claims of
accidents in Turkey caused by foreign plated vehicles which have a
valid green card.
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TURKISH INSURANCE INSTITUTE


Turkish Insurance Institute (TII) is founded in 1970, by the equal shares
of the Association of the Insurance and Reinsurance Companies of
Turkey and Milli Re. TII aims to disseminate the use of insurance in
Turkey as well as to carry out activities that will raise the public
awareness, improve the insurance industry, bring in staff to insurance
industry through vocational trainings, determine the economic, legal
and technical aspects as well as problems in all branches of insurance
including the social securities, prepare informative publications on
these matters and assist the Turkish insurance sector to take its place at
the highest level in economic and social life as well as in the process of
development.
In order to improve the quality and efficiency of employment in the
insurance sector, TII provides short- and long-term training
programmes to those working at the insurance companies (newcomers,
experts, managers), brokers (newcomers, experts), to the agencies
(newcomers, managers), experts and their employees.
39
OTHER INSTITUTIONS


Turkish Compulsory Insurance Pool (TCIP)
The Turkish Agricultural Insurance Pool
40
TURKISH COMPULSORY INSURANCE POOL



Subsequent to the Marmara earthquake which took place on 17th of August
1999 and caused loss of thousands lives and properties, great numbers of
precautions were taken in order to minimize the damages of Earthquakes by the
public authority. On of the most significant precautions is the execution of the
Turkish Compulsory Insurance Pool (TCIP).
The intent of the Compulsory Earthquake Insurance is to have a standard cover
with a minimal premium. Consequently, TCIP grants cover in specified
maximum sum insured determined by using unit cost of building construction.
As of 1st of January 2011 maximum sum insured amount granted by TCIP
policies in all structure types is determined as 150.000 Turkish Lira (100.000
USD). Nearly 3.5 Million dwellings hold TCIP policy .
The sum insured is determined according to the magnitude and structure type
however not exceeding the maximum sum insured amount of the dwellings. If
the value of the dwelling exceeds the sum insured amount given by TCIP, the
insured optionally can get additional cover for the exceeding amount from the
insurance companies.
41
TURKISH AGRICULTURAL INSURANCE POOL





In order to provide the coverage the risks threatening the agricultural industry
of our country, "Agricultural Insurance Code No. 5363" was enforced as of
14/06/2005.
The Agricultural Insurance Pool establishes the conditions for transferring risk
under reasonable provisions, ensure centralized payment of the indemnification
upon occurrence of the risk, improves and popularizing the agricultural
insurances
TARSIM, a management entity, was established with equal share as a
corporation by the insurance companies writing agricultural business in order
to carry out all tasks of the Pool, within the context of the law.
Insurance companies issue insurance contracts with their own name and all
risks together with the premiums on 100% thereof is transferred to Agricultural
Insurance Pool and through retrocession, the individual insurance companies
can take share optionally from the Pool.
The Government contributes 50 % exclusively to insurance contracts executed
under the Code, in terms of the premium on behalf of the farmers; the amount
of which to be determined by Council of Ministers on annual basis, with
respect to the crops, risk, region and premises scale.
42
THANK YOU FOR YOUR
ATTENTION…
ASSOCIATION OF THE INSURANCE AND REINSURANCE
COMPANIES OF TURKEY
www.tsrsb.org.tr
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