ISTANBUL- Hürriyet Daily News
Due to a young population and rising middle class, Turkey is a fruitful country for insurance business, according to BNP Paribas Cardif, a new player in the local field. The insurance penetration’s low ratio to the country’s gross domestic product is a good indicator that points out the potential, says the top executive of the company.
BNP Paribas Cardif chair Jean-Bertrand Laroche (L) says a strong distribution line is his company’s big advantage in Turkey. Hürriyet photo
Turkey remains a lucrative market for international insurance companies, according to the top executive of BNP Paribas Cardif, the insurance unit of BNP Paribas that recently acquired Turkey’s Fortis Emeklilik and Hayat Insurance.
The local branch aims to secure a 5 percent share of this growing market, said Jean-Bertrand Laroche, the chief executive of the group, speaking to journalists during a press meeting in Istanbul on Monday to reveal the company’s future plans.
“Turkey stands out as a promising market for us,” as the country’s strong economic growth accelerated to 11 percent in the first quarter, outpacing China, said Laroche.
Turkey’s expanding middle class will drive the growth in the insurance sectors, Laroche said. The company aims to reach nearly 900 million Turkish Liras in total volume of individual pension funds by the end of 2012. As of the end of last year, this figure stood at around 450 million liras.
Way behind Europe
Turkey’s insurance penetration’s ratio to gross domestic product still stands small when compared with many European counties, the chief executive said. The ratio for Turkey was floating around 1.5 percent by the end of last year while the figure was around 10.3 percent in France and 13.6 percent in the Netherlands. “We see the growth potential in the market,” said Laroche, noting that current number of individual pensioners his company is contracted to would rise from 76,000 to 152,000 until 2012.
“One of the greatest advantages of BNP Paribas Cardif is the vast distribution channel” it has through the Turkish Economy Bank, or TEB, said Laroche.
Last year, TEB’s main partner, the Çolakoğlu Group, and Fortis’ main partner, BNP Paribas, agreed to merge the two banks under the auspices of TEB. The Çolakoğlu Group and BNP Paribas hold equal shares in the bank, at 42.12 percent each.
Another French insurance giant, Groupama, first entered the Turkish market by acquiring a 30 percent share of Güneş Sigorta in 1991, acquired Başak Sigorta and Emeklilik during the privatization process in 2006 and it purchased Güven Sigorta in 2008.
Evaluating the possible affects of the eurozone crisis, Laroche told the Hürriyet Daily News on the sidelines of the meeting that “Italy would never be like Greece.”
Being the eighth largest economy in the world, Italy’s household debt is “at an acceptable level” despite the burden of a public deficit that is expected to extremely high by the end of the year, according to British daily The Guardian.
Italian household debt in 2009 stood at just 44.4 percent of GDP compared with a European Union average of 82.3 percent while corporate debt stood at 83.8 percent compared with an EU average of 120.8 percent, according to Reuters.
(Source: www.hurriyetdailynews.com )