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According to the “Global Insurance Outlook 2013” report recently released by Ernst & Young, Asian and European investors will focus on Turkey's insurance sector in 2013, particularly as a result of government incentives offered in private pension plans (BES).
The report said, “Turkey's young population and increasing qualified manpower potential in addition to the new regulations implemented regarding the insurance sector will direct the interest of Asian and European investors to Turkey as consumption has slowed down in those countries.” Commenting on Turkey's insurance sector, the report also underlined that this sector will follow the success of other sectors in the country and become a leader and a determinant in its region.
In first quarter of 2013, Europe's biggest insurer, Allianz, agreed to buy insurance business Yapi Kredi Sigorta from Turkish lender Yapi Kredi Bank to secure a bigger slice of a fast expanding market. The net purchase price for Yapi Kredi's 93.9 percent stake in Yapi Kredi Sigorta was TL 1.60 billion ($883 million).
Ernst & Young Turkey Audit Partner Seda Hacioglu said that before the implementation of the new regulations, only those who were employed were able take advantage of BES, but as of Jan. 1 anyone over the age of 18 is able to obtain a BES while benefiting from the government incentive of a 25 percent contribution to their monthly plans. “With the government incentive, the insurance sector has gained momentum and strengthened the marketing strategies of the insurance companies. In the first two months of 2013, the number of registered BES holders increased by over 200,000, which was four-and-a-half times greater than in the same period of the previous year. As of 2013, BES participants numbered 3.1 million with total value of TL 19.7 billion,” she stated.
Also pointing out that the incentives will encourage saving habits in society, Hacioglu added: “It's remarkable that the most significant increase has been seen among the 18-34 age group, which makes up 42 percent of the total participants, showing that the younger generations are planning for their future by saving more today. This presents a positive development for the growth and profitability of the sector.”