The insurance sector and Islamic finance products have great potential in Turkey, and both should be encouraged, the CEO of the Turkey Wealth Fund (TWF) said Thursday.
Zafer Sonmez pointed out that the share of the banking system in Turkey’s financial sector is huge, adding 95% of the sector consists of banking, and ‘this is not healthy.”
Speaking at the Sabah 35th Age Sector Meetings organized by the Sabah newspaper, which were held virtually due to the coronavirus pandemic, Sonmez stressed that insurance products became widespread after the establishment this year of Turkiye Sigorta by the TWF.
Turkiye Sigorta, which gathered six state-run insurance and pension companies under a single roof, was launched on Sept. 7 this year.
Sonmez said the ratio of the market value of the Turkish stock market to GDP is 25%.
“To increase this, insurance companies need to take a stronger place in the stock market.”
Turkish Finance Minister Lutfi Elvan said the insurance and private pension sector, which fulfills the function of providing savings to the country’s economy, continues to grow steadily every year.
He noted that a total of 63 companies operate in the sector, saying total assets have reached 284 billion liras ($37 billion), total premiums have reached 59 billion liras ($7.6 billion) and the total number of participants has reached 12.5 million people.
The direct contribution of the sector to employment is over 100,000 people.
He also noted that in the coming period, the government will take concrete steps to move the industry forward.
“We are working on innovations that will make it attractive for our citizens to save through the private pension system. The insurance and private pension regulation and supervision agency has also started preparations for the development of participation insurance.”
Elvan also stressed that the government is working on a roadmap to increase the integration of the sector into the international system.