Turkey's young and under-insured population is increasingly attractive for international providers.

MIne Ayhan
General Manager
Generali Sigorta
Ceyhan Hancıoğlu
General Manager
HDI Sigorta

What attracted your company to Turkey initially?

CEYHAN HANCIOĞLU Talanx Group's four core markets are Brazil, Mexico, Poland, and Turkey. Turkey is a very important market for Talanx due to its growth potential. A regulated market and a young population with low insurance penetration, make an attractive mix for foreign participation. Today, HDI Sigorta is well-represented nationwide, employing about 250 people and operating in 10 regions, with at least one point of sales in every city. Agents comprise our key distribution channel, and generate 63% of our business, with 17% deriving from brokers.

MİNE AYHAN Due to Turkey's great potential, Turkey was always on the Generali Group's radar. Now that Turkey is a rapidly developing, emerging market, it also illustrates our reasons for trusting in Turkey even when there were no other foreign investors in the insurance business. I need to emphasize that Generali Turkey has been the oldest foreign insurance company to have stayed here continuously. In Turkey, the growth of the insurance market is roughly around 25% annually, which illustrates a significant difference when you compare it with the 0.5% growth you see in Western Europe. The Turkish economy is growing in a stable way and remains attractive to all investors.

What are you doing to specifically to target SMEs in Turkey?

CH As a part of our strategy, we are more active in small and micro enterprises such as simple risk, middle class business, including small ateliers, warehouses, and retail outlets. We have specialized SME and SME ECO product packages, with additional coverage depending on the business line of a specific SME. Small and micro segment insurance is still not so widespread, and penetration is low. As an insurer, our aim is to reach SME owners and inform them about the risks they may face and the benefits of insurance coverage. We offer SMEs risk engineering, consulting, and products specifically tailored to their needs, as well as after-sales support.

How would you assess the level of foreign interest in the non-life insurance sector?

MA The share of foreign investors was around 35% before 2005. Now it is around 75%, or perhaps more. We only have a few companies that are purely local or joint ventures. Since the crisis in 2008, competition has switched into a different mode. All the margins are thin. Not only Generali, everybody is trying to create smart solutions, sophisticated tariffs, and good PR. Everything is for creating convenient solutions for the customer's life.

What is your outlook for the Turkish insurance sector?

CH Turkey's non-life insurance premium share as a percentage of GDP is 1.3%, significantly below that of Central and Eastern Europe. Non-life insurance spending per capita is a mere TL275. A low insurance base, growing population, and increasing welfare all highlight the potential of the Turkish insurance market. Already the market is characterized by service quality and efficiency in paying out claims. There is scope for improvement in terms of segmentation, pricing, claims management, and customer orientation. Turkey adapts easily to new technologies and regulations. By implementing global best practices, we can gain further ground locally.

MA According to the estimates of the Turkish Statistical Institute (TSI) in 2015, Turkey's population is expected to exceed 77 million. The average insurance premium per person is $646, but in Turkey this amount decreases to $146. This data indicates that in the Turkish market there is a way to go. In 2023 it is expected that Turkey will be the 16th largest market in terms of non-life insurance throughout the world. If we look at total premium volume of Turkey and other countries, Turkey's young population and rankings have high potential, and we hope it will rise.