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Untitled Document population premium waiver Aegon 2012 death 2023 Katılım Hayat ve Emeklilik health Islamic finance Asya Emeklilik
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Turkish unemployment is falling in general, but rising in the ages where we insure


Unemployment benefit (PPI) is a popular rider for bancassurance life products sold to back loans or credit card balances.

When the products were first launched a number of years ago, actuaries in Turkey had limited data on which to base pricing and reserving. Now we are beginning to build up a portfolio of experience, but unemployment rates are notoriously hard to project into the future as they depend on a wide number of variables linked to the economic cycle.

The good news for insurers is that the unemployment rate is falling.

But this is just the headline rate. Figures given by the head of Turkey’s Union of Chambers of Commerce at a recent economic summit show a more concerning picture for the nation in general and for those writing PPI riders in banassurance in particular.

Non-life insurance: 100 not out


The Insurance Assocation’s report “Shaping Our Future: 2023 Vision for Turkish Insurance and Pensions Sector” sets some heady targets for the industry by the time the Turkish Republic reaches its century.


In this article I want to flesh out some of the factors behind the headline figure of non-life branch premium increasing fourfold to 63 billion Turkish lira, maling Turkey the 16th largest non-life market in the world.


First of all, this is the “high aspiration growth scenario”. As actuaries, we are used to scenario testing. Using full stochastic methodology we would run a model on a range of assumptions, all calibrated to represent the probable likelihood of them coming true. In presenting the results to our clients we may choose to illustrate a few of these scarios calling them “market consistent” or “best-estimate” or “pessimistic” or “optimistic”. We may prefer to use euphemisms rather than the latter two, choosing to call them “cautious” or “aggressive” respectively.

SWOT analysis on Turkish insurance industry


Turkey is always a crazy conundrum. One expat friend of mine describes it as “the agony and the ecstasy” of living here. The very factors that excite our senses and enliven our imaginations can at the same time be the ultimate sources of frustration and even pain.

“How much longer?” is my usual cry when I discuss with someone the fact that, given all of the economic and demographic data we have to hand, it is obvious that at some stage in the future the Turkish insurance market must achieve growth and take its place as a strong contributor to Turkey’s GNP, just as the insurance industry is across most of the developed world.

A SWOT analysis included in the Insurance Association’s report “Shaping Our Future: 2023 Vision for Turkish Insurance and Pensions Sector” comes to the not-unsurprising conclusion: the Turkish insurance market has an unfulfilled potential.


Campaigns to quit smoking show positive results


A new survey shows that tobacco use in Turkey has decreased to 27% of the adult population.

Foreign visitors to Turkey often comment on the high smoking rates; particularly now a lot of people in Europe and America have quit. In recent years the government has introduced a number of bans on smoking, most noticeably in restaurants and in the workplace. Gone are the days when a ride on an inter-city bus in Turkey meant finding your seat through a haze of cigarette smoke.

With the health ministry spending over 7 billion Turkish Lira each year on the treatment of diseases related to tobacco and smoking, there is clearly a need to improve public health. But it is not only the Social Security system that stands to gain from a reduction in smoking. Life insurance companies do not use smokers and non-smokers rates, so any reduction in smoking in the short-term can be expected in the medium-term to feed through to higher profits in life insurance and private health insurance.

At last – change to the taxation of savings products


Outrageous! Daylight robbery! We all shouted when the tax regime for benefit payments from life insurance savings plans meant that the whole fund, not just the investment income, was subject to the witholding tax knwon as “stopaj” in Turkish.

Likewise, we all cheered when Max Steinbuchel won a court case in 2009 claiming that this was unfair. But, this being Turkey, it has taken until now for the tax authorities to do anything about it.

From 29 August 2012, only the investment return portion of the proceeds from a life insurance savings policy will be subject to tax.

Congratulations to actuarial students who have reached the next stage in training


Results of the actuarial exams held between April and July 2012 mean that more young student actuaries have completed parts of their training.

The Turkish rules covering the actuarial profession recognise those who have completed the first part of the actuarial exams as being “Actuarial Interns” (Stajyer Aktüer) and those who have successfully passed all subjects in the second part as “Assistant Actuaries” (Yardımcı Aktüer). Full qualification is granted to those who complete the third part and satisfy the work experience requirements.

Notices published on the Treasury’s website last week announced that these young colleagues of mine in the profession had achieved these milestones:

Just a ball of confusion


The Temptations sang “just a ball of confusion, that’s what the world is today”. Well, as of 1 July 2012 that’s what the law governing insurance in Turkey is.

The new Turkish Commercial Code, which was published on 14 February 2011, went into force on 1 July this year. It completely replaces the old law governing the running of insurance business. Insurance lawyers and professionals have been attending courses and workshops for the last few months to understand the implications for their business.

Now we are facing a period of adaptation, with some of the subsidiary regulations issued under previous legislation being still in force; others however no longer apply as they are overruled by provisions in the new overriding legislation.

Cigna and Finans Emeklilik deal is a joint venture


The rumour mill was right about Cigna beating off competition from Axa and Aegon to buy a stake in Finans Emeklilik. Details announced today show the deal is not a purchase but a joint venture, with Cigna having the majority 51% share while bancassurance partner Finansbank retains a 49% stake.

Key to all such deals is normally the length of an exclusitivity deal, but with a joint venture this is less relevant of course. Nevertheless they have announced a 15 year period.

For a 51% stake in Turkey’s 6th largest bancassurer, Cigna is paying 85 million euros up front. Finansbank will also receive commission and participate in the profits over the next 15 years; the Turkish financial press is putting a figure of over 400 million euros on this.

Aiming for gold by 2023


In 2023 the Turkish Republic will celebrate its 100th birthday. In preparation for this milestone event, various government departments, industry sectors and civil society groups are making plans based around where they would like to be in the year 2023.

The Turkish insurance sector is no exception, and a major report produced by the Association of Turkish Insurance Companies in association with consultants McKinsey sets targets for growth between now and 2023. It is entitled “Shaping Our Future: 2023 Vision for Turkish Insurance and Pension Sector”.

Without vision the people perish; this is a vision for robust growth as insurance takes its place in the wider vision announced by the government to make Istanbul into an international financial centre.

The main headline is that insurance should grow from its current position of 0,5% of GNP to some 11%.

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