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Tourism crisis and coup attempt hit unemployment
Government's plans for our sector in 2017
Demir Hayat now owned by EMF New Europe Insurance Fund
Government rethinking their plans for mandatory private pensions
Nothing's certain except death and taxes
Staggered start to Automatic Enrollment
BES pension funds now as popular an investment as term bank deposits
Takaful insurance trade association formed
Treasury reminds employers of their responsibilities under Automatic Enrollment
Circulatory system disease and cancer the biggest killers in Turkey
Untitled Document population premium waiver Aegon 2012 death 2023 Katılım Hayat ve Emeklilik health Islamic finance Asya Emeklilik
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Health insurance: content of company actuary's report


The regulations covering private health insurance which were issued on 23 October 2013 included provisions for the Treasury to outline the contents of an annual actuarial report on their company’s activities in the health branch.

Two days ago the Treasury issued sectoral announcement no 2014/10 which contains the format of this report. Just in time, because the first reports for the year end 2013 were due to be sent to the Insurance Information and Monitoring Centre by the end of April (a little under three weeks away!). But actuaries can heave a small sigh of relief: the last paragraph of the sectoral announcement provides for a deadline of the end of June for the 2013 reports, with the April deadline applying for future years.

The most prestigious names in Turkey


Reputation is surely one of the most important factors when choosing an insurance company, as the relationship between customer and insurer is based on trust.

The Turkey Reputation Index is published every year by İstanbul Ticaret University, and it evaluates how the public view companies in different sectors.
Overall, the leaders were Koç Holding (with a score of 5,378 points), Sabancı Holding (5,211) and Arçelik (4,116). Koç has divested itself of its insurance interests, but still has significant commission income via Yapı Kredi Bank and Otokoç Sigorta Aracılık Hizmetleri. Sabancı is of course the SA in AvivaSA.
Unemployment figures for 2013 announced


Official figures for 2013, published yesterday by the Turkish Statistical Institute put unemployment for 2013 at 9.7%. This is 0.5 percentage points higher than the 2012 figure of 9.2%.

Delving into more detail we find that unemployment for urban areas (where most of our insureds live) is in double figures at 11.5%; in the countryside it is 6.1%. The actual level of unemployment is believed to be higher due to the large numbers of people who are not part of the workforce but not actively seeking employment. However, the definition of unemployment used for loan insurance in Turkey also excludes these people.

Debentures on the rise in property financing


Many life-insurance policies sold in the Turkish market are linked to loans so any changes in borrowers’ behavior quickly impacts bancassurers.

The Turkish mortgage market has not been around for long. In the old days, people purchasing property from developers would typically enter into an agreement to pay by installments, and sign a “senet”, the Turkish word for debentures.

Following the rise in interest rates on 17 December there has been a marked return to this style of financing a house purchase, with the number of sales being related to debentures increasing steeply. 

Population of Turkey increased by 1 million in 2013


Turkey’s population according to official figures grew by 1,040,450 people during 2013, reaching 76,667,864 at the end of the year.

The rate of increase in population also increased, from 1.2 per mille in 2012 to 1.37 per mille in 2013.

Of interest to insurance companies, focusing on potential customers, are figures relating to the population of working age. The population aged between 15 and 64 increased by 1.64 per mille to 51,926,356. This is some 840,000 people more than at the end of the previous year.

Maximum State Contribution for 2014


The maximum State Contribution to Turkey's personal pension system is linked to the minimum wage. This increases each year in January. With the recent increase, the maximum State Contribution per participant for 2014 increases to 3,307.50 TL.

The State Contibution is 25% of the participant's own contribution, up to an annual limit of 25% of the minimum wage for the current calendar year. As the minimum wage for 2014 is higher than that of 2013, participants in the BES pension system have the potential to receive nearly an extra 300 TL of State Contribution than they did in 2013.

Damping down the economy – limits will hit loan insurance


Turkey’s economy is growing and growing, and many experts fear overheating caused by excess consumption.

A draft law, expected to be in force before the end of the year, will limit the number of instalments that can be offered to credit card holders.

The use of instalments is a regular feature in Turkey. If paying by card the retailer will normally offer you two choices: “one deduction” or “instalments”. If you purchase, say a 1000 TL item with 4 instalments then a block of 1000 TL will be put on your card (reducing the available credit limit) but you will only see 250 TL appear on your statement this month. The remaining 3 instalments of 250 TL will appear on your credit card statement in each of the following months.

Mortgage market developing with longer terms


For many years it was impossible for Turks to get mortgages. But the newly developed mortgage market is gradually beginning to take on more of the characteristics we would expect.

A section in The Central Bank’s latest Financial Stability Report deals with the way changes in the term and interest rates applicable in the mortgage market are having a positive effect on households being able to purchase their own home.

In 2009 mortgage interest rates were around 12% and the most common term was just 5 years. By 2013 interest charged had fallen to 9% and term had lengthened to 7-10 years. Each of these has a positive effect on the amount of monthly repayments required: the Central Bank’s report gives a figure of a 21% reduction. 
Population: 75 million; # credit cards: 60 million


The driver of growth in Turkey's life insurance market is the bank distribution system. One of the drivers of growth in retail banking is the explosion in the number of credit cards over the last decade.

Figures published by the Banking Supervision and Regulation Agency show that at the end of October 56.7 million credit cards were in circulation in Turkey.  This compares with just under 20 million 10 years ago, an increase of a whopping 190%, or 11% p.a..

In the first 10 months of 2103 customers loaded 360 billion TL of purchases and cash withdrawals on to their cards; prediciions for the total figure to year end are in the 425-430 billion TL range.

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