1
Insurance Association
of Turkey
&
Turkish Insurance
Market
18 May 2016
2
As of today;
37Non Life
1 Reinsurance
4 Life
19 Life and
Pension
A total of 61 companies are
actively operating
Number of Insurance Companies
3
Company employees 20.000
75.000employeesMore than
Brokers 120Loss adjusters 1 300
Agents 16.000
Number of employees
4
Prim Üretimi 2010 – 2015
Increase in total premium
productionbetween 2010-2015 is % 41 (in terms of USD)
Premium Production
2010 2011 2012 2013 2014 2015
Non Life 8,0 8,6 9,5 10,9 10,4 11,7
Life 1,4 1,6 1,5 1,8 1,5 1,6
Total 9,4 10,2 11,0 12,7 11,9 13,3
0,0
2,0
4,0
6,0
8,0
10,0
12,0
14,0
Bill
ion
USD
Non Life Life Total
0
2
4
6
8
10
12
14
Written premiums
2010-2015
2010 2015
2010-2015 Premium Production, Billion USD
41%
Private Pension Funds in Turkey
5
0
2
4
6
8
10
12
14
16
18
2010 2011 2012 2013 2014 2015 2016April
Total Government Contribution 0,60 1,38 1,76 1,95
Contributor's Total Funds 6,32 7,37 8,99 13,18 15,88 15,64 15,62
(Billion USD)
6
72%
Foreign players in the market:
• Reflecting trust into the Turkish market
• Transfering global practices into the
local market
• Enabling insureds to benefit from
international novelties and
developments
Foreign Capital in the Market
Share of foreign capital in total
paid-up capital
7
Prim Üretimi Dağılımı (2015)
ACCIDENT4%
HEALTH 11%
MOTOR OWN DAMAGE
18%
MARINE2%
FIRE/NATURAL FORCES
14%GENERAL LOSES
MTPL24%
GENERAL LIABILITY2%
OTHER3%
LlFE12%
GWP broken down by branches
TSB, 2015
8
Dağıtım Kanalları (2015)
Agents
63%
Banks
15 %Brokers
13%
Other
2%
Companies7%
Banks
79%
Brokers
1%
Other
2%
Agents
9%
Companies9%
Non-life Life
Distribution Channels
TSB, 2015
9
Technical and Financial ResultsTotal (Million USD)
2013 2014 2015
Technical Profit 594 670 56
Financial Profit 208 137 165
Profit After Tax 645 634 92
(Million USD)
10
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Equity 4.106 5.695 5.614 7.162 5.028 5.154 5.064 6.930 8.112 7.533
Return on Balance Sheet 153 424 596 182 -186 -15 -658 768 730 -577
Return on Equity 3,7% 7,4% 10,6% 2,5% -3,7% -0,3% -13,0% 11,1% 9,0% -7,7%
-15,0%
-10,0%
-5,0%
0,0%
5,0%
10,0%
15,0%
-2.000
-1.000
0
1.000
2.000
3.000
4.000
5.000
6.000
7.000
8.000
9.000M
ILLI
ON
TL
Equity and Return on EquityNonlife Companies
Source: TSB
11
Prospects for the
Turkish Insurance
Sector
SEKTÖR PRIM ÜRETIMI (MILYAR TL)
A Promising Market: Rapid growth rate
12
17,2
31,0
2011 2015
2011-2015 80 %
13
A Promising market: Low densityTotal Premium Per Capita(USD)
128136
146
166153
0
20
40
60
80
100
120
140
160
180
2010 2011 2012 2013 2014
14
• The rules and regulations are in compliance with the EU norms and thesector is highly regulated and supervised
• The authority and the association have been working together to achievecompliance with the Solvency 2 regulations
Sonuç
A Promising Market: Sound and Clear Financials
15
Yeni Ürünlere Yönelik Fırsatlar
Turkish Insurance Market continues its development with new products:
• Annuity products
• A model on complementary health insurance is on its way
• Legal protection insurance for employees is in the governmentprogramme in 2016
• Despite its potential, surety insurance is still a neglected branch
A Promising Market: New Products
16
Motor Third Party
Liability Insurance
(MTPL)
17
Growth in MTPL
The number of MTPL policies and premium production have been on the rise
in the past decade on a yearly basis
1.360 1.583 1.815 1.9722.306
2.700
3.600
4.966 5.073
6.793
0
1.000
2.000
3.000
4.000
5.000
6.000
7.000
8.000
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Premiums(Milion TL)
9,5 10,0 10,4 10,711,7
12,913,9 14,1
15,9 15,9
0,0
2,0
4,0
6,0
8,0
10,0
12,0
14,0
16,0
18,0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Number of policies(Million)
Market Share of MTPL
Share of MTPL has reached to 25 % in 2015
18
MTPL
25%
Own damage
20 %
Other
26 %
Sickness-Health
13%Fire and
Allied Perils
16%
Source: TSB
19
Loss in MTPL
In the last decade, companies reported loss in MTPL
for each and every single period
-119 -245 -467
-296 -587 -462
-1.285
-654 -885
-2.345 -2.500
-2.000
-1.500
-1.000
-500
0
Teknik Zarar
Source: TSB
20
Reasons for the Loss in MTPL
21
Reasons for the Loss in MTPL
Varying interpretations due to lack of clarity in the
definitions and coverages of the indemnities
Lack of a standard calculation method for loss of support
and disability
Retroactive court decisions
22
Reasons for the Loss in MTPL
Share of bodily claims has rapidly increased in total sums paid
0%
10%
20%
30%
40%
50%
60%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
13% 13% 15% 16%13%
17%
26%
35%
47%51% 50%
Source: TSB
23
Average
Freq. (%)
Average
Prem. (€)
Turkey 9% 110
EU 6% 230
Turkey: One of the lowest average premiums
and the highest frequency
Reasons for the Loss in MTPL
2013
24
THE GOOD NEWS IS…
Regulatory changes needed in the Highway Traffic
Law came in force…
25
Direct Settlement System
Current Problems of Subrogation Process
• Higher costs and lack of control in subrogations
• Problems regarding spare parts and repair shops
• Lack of customer ownership
26
Direct Settlement System
• Appr. 16 million customers
• Solution to the important dilemma: quality of service instead of price competition
• Companies would retain their customers and gain theirloyalty as in the motor own damage business
27
28
Thank you...