Aysun YILDIZ-OZER Deputy Secretary General

Transcription

1 Consumer Protection & Data Protection Regulations: Challenges for a developing insurance industry Aysun YILDIZ-OZER Deputy Secretary General 22 March 2018

2 Agenda I. An overview of Turkish Insurance Industry II. Consumer Protection in Insurance Regulation III. Data Protection Act

3 An Overview of the Insurance Sector in Turkey

4 Basic Indicators Number of Insurance Companies: 63 Non-Life: 39 Pension and Life 22 Reinsurance: 2 4

5 Basic Indicators Total Assets*:143,8 bln TL (40,5 bln USD) Premium Production: 2016: 40,5 bln TL (11,5 bln USD) 2017 : 46,5 bln TL (13,1 bln USD ) 14% *2017/Q3 5

6 Premium Production ( ) million TL 50,000 48,000 46,000 44,000 42,000 40,000 38,000 36,000 34,000 32,000 30,000 28,000 26,000 24,000 22,000 20,000 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 - CAGR 6,844 Life %15,5 %14 5,039 Non-life 3,761 3,280 3,395 39,660 2,711 35,450 2,686 27,068 20,832 22,712 17,119 14,

7 Premium Production ( ) Million USD 14,000 CAGR 12,000 10,000 Life Non-life %5 %4 1,594 1,525 1,410 1,289 1,426 1,814 8,000 1,422 6,000 4,000 7,665 9,630 9,778 9,761 9,276 10,034 10,515 2,

8 Private Pension System Auto-enrollment Total Funds in Pension System : 2 bln TL (540 mln USD) Number of Paticipants : 3,5 mln 3rd Pillar Total Funds in Private Pensions: 79,2 billion TL 21 bln USD Number of Paticipants : 6,9 mln Source: Pension Monitoring Center, 26 January

9 Penetration & Density Insurance Penetration Rate(%) 2016 Insurance Density($) 6,7 1, , , ,6 1, , Europe Non-life Life Turkey Europe Non-life Life Turkey 21 Source: Sigma No3/2017 9

10 Private Pension Funds/GDP(%) , Weighted Average of OECD 2.1 Turkey Source: OECD 2017, Pension Markets in Focus 10

11 Banking vs Insurance Assets, 2016 Shares in the financial system 2,6 trillion 123 billion 87% 4% Banking Bankacılık Sektörü Insurance Sigorta Sektörü 11

12 Foreign Direct Investment (2017) Insurance 7.9 billion $ Others 3.4 Billion $ TOTAL 51,1 billion USD Banking 39.8 billion $ Source: TCMB, Balance of Payment Statistics, September

13 Providing Coverage for the Economy Büyük Yatırım Projeleri 35 times of GDP, 90 trillion TL (25,5 trillion USD) Source: Undersecretariat of Treasury, Insurance and Private Pension Report

14 Payment for the the Losses 2016 Incurred Loss 2017/9 Incurred Loss 2,4 billion TL 23,4 billion TL 2 billion TL 20,5 billion TL 21 billion TL 18,5 billion TL Life Non-life 6,6 bln USD 5,8 bln USD Life Non-life

15 Claims in Credit Life Insurance In Credit Life Insurance; (September) Insureds Incurred Loss 1,1 Bln TL (0,32 bln USD) 800 MlnTL (0,22 bln USD) 15

16 Paid Claims 173 Million TL (48,7 mln USD) Billion TL (1,13 bln USD)

17 Funds bln TL (2017/Q3) Others 3,1 billion TL (0,9 bln USD) Bank Account 39,8 billion TL (11,2 bln USD) 118,6 Billion TL (33,4 bln USD) T-bills & Gov. Bonds 41,8 bln TL (11,8 bln USD) Capital Market 23,1 billion TL (6,5 bln USD) Corporate Bonds 10,8 billion TL (3,04 bln USD) Source: Takasbank 30/09/2017, Balance sheet2017/q3

18 II. Consumer Protection in Insurance Regulation

19 Consumer Protection Act 6502 Consumer: relatively new in Turkish legislation 6502 CPA enacted in 2014 Replaced earlier law encted in has articles regulating & restraining insurance business It has brought extensive responsibilities to inform the policy holders 19

20 Consumer Protection Act 6502 Articles regulating credit linked insurance Written and overt consent of the credit holder is required Creditor shall not require insurance as a prerequisite Credit holder can choose the insurance company independent of the credit instituiton Act has brought cumbersome disclosure procedures - forms with many pages - complicated and expensive: additional operational costs 20

21 Consumer Protection Act 6502 Consumer Protection in Credit linked Insurance Very specific and detailed regulation: not easy to comply with Law not following the novel products in the market Example: The Act also stipulates: the amount of the sum insured must be equal to the loan not allowing to cover late payment fines for the credit not able to offer additional covers linked with the credit product Difficult to develop products with varying sum insured 21

22 Consumer Protection Act 6502 CPA not compatible with digital insurance Written/signed consent of the policy holder It does not allow digital means as a way of approval equivalent to signature It also requires insurance companies to issue a printed and signed copy of the policy 22

23 Data Protection Act

24 Protection of Personal Data PPD was enacted in 2016 An independent board is in charge of regulation Insurance companies demanded exemption from the regulation in terms of - accessing personal health data - keeping - processing - sharing with the trusted third parties (Only on the condition that it is used for doing insurance, risk assesment and underwriting purposes for health and group life insurance policies) 24

25 Last Word... Turkish market is dominated by MTPL and by agencies as the main distribution channel Areas to expand: health (esp. complementary health) and life branches Digitalization is important to expand these business Consumer protection and data protection not allowing distance sales Hence these regulations restraining development potential 25

26 Last Word... Consumer Protection should protect policy holders; but should not restrict the business PPD/Consumer protection regulations makes it hard for the business Personal data protection new in Turkey should adopt to the needs of the developing insurance industry Association lobbying to explain the specific to be taken into account for insurance market 26

27 Thank you for your patience Aysun Yıldız-Ozer Deputy Secretary General