Insurance and private pension sectors play a critical role in the Turkish economy

Abdulcelil Alkış, Founding President of the Turkey Entrepreneurial Agencies Platform (TÜGAP), said that the insurance sector and individual retirement systems play a critical role in the country’s economic stability, growth and sustainable development.

Examining the contributions of the insurance sector and individual retirement systems to the Turkish economy in his study, Alkış emphasized that these two sectors can create significant effects in a wide range from increasing savings to controlling inflation, from deepening capital markets to increasing employment.

Alkış, who is also the Founder of Gurbet Kasko, said, “The Turkish economy has been taking one step forward and two steps back in recent years. We are having difficulty maintaining our economic gains. In the face of this situation, the insurance sector and individual retirement systems are two important building blocks that have the potential to encourage the capital accumulation needed by the economy and to make growth sustainable.” In this context, Alkış stated that the addition of $300 billion worth of gold to the Turkish economy could be possible by strengthening insurance agencies.

In his study, Alkış evaluated the effects of the insurance sector and individual pension systems on the economy under four main headings and drew attention to the following points:

“Increasing savings: While individual retirement systems contribute to increasing long-term savings, they also make it possible for these savings to be returned to the economy as investments. This encourages capital accumulation and provides significant momentum to economic growth. Controlling inflation: Increasing savings reduce consumption expenditures and alleviate inflation pressure. Thus, it is possible to keep demand-driven inflation under control and ensure economic stability. Increasing employment: The insurance sector and individual retirement systems create a wide range of employment opportunities, both directly and indirectly. The agencies, consultants, managers and support services working in these sectors constitute an important workforce that adds value to the economy. Deepening capital markets: Individual retirement funds provide significant resources to capital markets. These funds increase the liquidity of the markets by investing in various financial instruments and contribute to market depth.”

“Under-the-pillow savings have great potential”

Alkış emphasized that the insurance sector and individual retirement systems in Turkey are not yet operating at their full potential, and that especially the ‘under the pillow’ savings that are not included in the system constitute a great potential, and that activating this potential will provide great gains for the Turkish economy.

Stating that strengthening agencies operating in urban and rural areas will make it possible to reach a wider audience and ensure greater participation in the system, Alkış made the following suggestions for the sector in this context:

“Expanding and strengthening the agency network: Encouraging and supporting insurance agencies will enable these sectors to reach a wider audience. Awareness and education campaigns: Informing citizens about insurance products and the benefits of individual retirement systems will increase participation in the system. Tax incentives: Increasing tax incentives for those participating in the individual retirement system can ensure that this system is preferred by more citizens. Strengthening the digital infrastructure: Developing the digital infrastructure and using technological innovations will ensure that insurance services are provided more efficiently and effectively.”

“Strengthening the sectors may be the recipe for salvation for the Turkish economy”

Inviting citizens to take out insurance and join the individual retirement system, Alkış said, “This issue is completely far from politics, it is a national issue and a system that will protect our generations in the long term. The insurance sector and individual retirement systems are of great importance not only for economic growth but also for social welfare. Strengthening these sectors can be the recipe for salvation for the Turkish economy.” – MERSİN