Do not put content on the brand signature area Jetse Frederik de Vries CEO INTERMEDIATION in the TURKISH LIFE INSURANCE and PENSION MARKET.

Jetse Frederik de VriesCEO

INTERMEDIATION in the TURKISH LIFE INSURANCE and PENSION MARKET

ING INSURANCE-SNAPSHOT

#3 in US Retirement Services

#1 life insurer in the Netherlands

#2 Pensions company in Latin America

#1 Life & Pensions provider in Central Europe

#3 foreign life insurer in Asia

• 7 years of experience in the pensions business

• Expanded product range: Personal Accident ProductsCredit Life, Term Life and Pensions

• More than 300.000 customers

• 6th in pensions investment funds• Distribution through bank and independent

property&casualty agent channel.

ING INSURANCE has an attractive mix of mature businesses and strong positions in growth markets

Banking - Investments - Life Insurance - Retirement Services 3

TURKEY- SNAPSHOT

PLENTY of SCOPE

for FURTHER

GROWTH

78.785.548

29.2 (2010)


TURKEY- ECONOMIC OUTLOOK

remarkable performance with a steady growth over the last six years

2010: a sound economic recovery

a faster decrease in the unemployment rate in the post-crisis period.

•USD 83 billion of FDI

•15th most attractive FDI destination for 2008-2010 (UNCTAD).

•16th largest economy in the world

•Robust economic growth over the last seven years with an average annual real GDP growth of approximately 4.3 percent.

Remarkable resilience of the Turkish economy and financial system against the crisis and prudent macroeconomic policies

enabled Turkey to decouple favorably from most of the developed and developing countries


TURKEY- POLITICAL OUTLOOK

• The AKP government remains generally popular, particularly in the face of generally weak opposition parties.

• However, prospects for EU accession remain a long-term goal despite significant efforts by the Turkish government.

The secular elite in the army and courts remain staunch opponents of theAKP and its perceived Islamist agenda.

Political Violence: Kurdish separatists, Islamist extremists andultranationalists.

The Turkish government is strongly committed to improving the business climate for the insurance industry.


TURKEY- PEOPLE & MENTALITY

friendship & business relations

POPULATION 78,785,548 (July 2011 est.)

Age Structure 0-14 years: 26.6% (male 10,707,793/female 10,226,999)15-64 years: 67.1% (male 26,741,332/female 26,162,757)65 years and over: 6.3% (male 2,259,422/female 2,687,245) (2011 est.)

Population Growth Rate 1.235 % (2011 est.)

Major Cities and Population Istanbul 10.378 million; Ankara (capital) 3.846 million; Izmir 2.679 million; Bursa 1.559 million; Adana 1.339 million (2009)

Collectivism : high Uncertainty avoidance : high Power distance : high Masculinity : middle

high social networking

young demographics

Building trust is the key to building close and strong relationships with

customers.

Turkish people are “emotional “buyers


LIFE INSURANCE in TURKEY



The Turkish insurance industry is soyoung and penetration as yet so

underdeveloped

Turkey has more than 78 million citizens, with an average age of 29.

The potential to sell life assurance, savings and pension products and employer products is significant.



• Total gross premium generation in Turkey reached TRY 12,436 million in 2009.

• Negative growth of 7.3 percent marked the first quarter of 2009.

• Decrease in insurance demand and price competition reduced premium income growth rates in 2009.

• Before the crisis, total insurance premium production had grown by a CAGR of 13.4 percent from 2004 to 2009


LIFE INSURANCE in TURKEY: An Overview

PREMIUM GENERATION (1.000 TL)

Personal Insurance

Group Insurance

PREMIUM GENERATION by PRODUCT(%)

Annuity Insurance

Long-Term Life Insurance

One-Year Term Life Insurance

Mixed Insurance

Life Coverage Only

Demand in Life Insurance products is increasing as of 2009, after the crisis;

Turkey gross life insurance premium registered a healthy increase of 16.2% during the period from 2001-2010.

The gross premium for life insurance increased from USD 375 million in 2001 to USD 1,447 million in 2010.


LIFE INSURANCE in TURKEY: DISTRIBUTION CHANNELS

BROKER and AGENCY are commonly confused terms in the intermediation terminology in Turkey:

Brokers in Turkey are usually the so-called alpha-houses (Marsh, Mercer, Aon...etc.)

Agencies are in a closer, sometimes tied relationship with the insurer/pension provider and they observe the interests of the insurer and they sell non-life insurance mainly

Direct individual sales teams, typically tied agents, sometimes self-employed, sell exclusively for one company.


LIFE INSURANCE in TURKEY: DISTRIBUTION emerging as a competitive differentiator

The agency channel has declined.

At the same time, the bancassurance channel has increased from 42% to 55% in life in the last three years.


LIFE INSURANCE in TURKEY: DISTRIBUTION 2009&2010

Bankassurance is growing, agencies are going down.

The broker model has a slight share.

There are also a number of new and competing distribution channels such as direct marketing, telemarketingand internet marketing.

PREMIUM GENERATION by DISTRIBUTION CHANNEL

ALTERNATIVE CHANNELS

HO & DIRECT SALES

AGENCY & BROKER

BANK


PENSIONS in TURKEY


PENSIONs in TURKEY: an OVERVIEW

• HOW DID PENSIONS START in TURKEY? inefficiency of the social security system.

• However the legal and institutional framework of the Turkish Private Pension System was completed in 2002. Implementation of the private pension system is a major milestone in the improvement of the public social security system.

•The first pension policies have been issued on October 27, 2003

Number of Participants Funds under Management (1.000 TL)


PENSIONs in TURKEY: an OVERVIEW

The Turkish private pension system is a voluntary, defined contribution system intended to be a complementary scheme to the mandatory social security scheme, which provides retirement earnings to participants on a pay-as-you-go (PAYG) basis.

The penetration of pensions is low. There are exclusive tax advantages, but only %58 of the customers are aware.


PENSIONs in TURKEY: How much do Turkish People Save for their future?

PUTTING THE BES SYSTEM INTO THE CONTEXT OF FORMAL SAVINGS IN TURKEY:

Pension Funds Under Management represents only 1,5% of the total savings market.

The full breakdown is as follows: 47% Bank deposits in TL

23% Bank deposits in foreign currency 10% Government bonds

6,5% Stock Market 5% Mutual Funds 4% Term deposits

1,5% PENSIONS 3% Various other items


PENSIONs in TURKEY: DISTRIBUTION CHANNELS

THE SAME DISTRIBUTION CHANNELS AS IN LIFE INSURANCE


PENSIONs in TURKEY: DISTRIBUTION CHANNELS

Proportions by distribution channels given out of a sum of 2.203.886 contracts in force as of 2009 year-end. “Other” covers “Call Center” and “Broker”

Direct Individual Sales

Corporate Sales

Agency

Bank

Others

Contracts acc. to Sales Channel

Agencies and banks don’t display a remarkable performance in sales of pension plans mainly due to the fact that they focus on non-life insurance sales. The potential these two branches isn’t applied yet to the sales of pension products.

-Tied agencies,

-Individuals who are not permanent staff at a bank or agency, but works on a fixed pay + premium model


WHO WILL BE THE WINNERS?


WHO ARE IN THE CONTEST?


WHO WILL WIN?

Those who listen to the customer.

Net Promoter Score

Agents have much more success in terms of client retention and average premium than other channels


WHO WILL WIN?

Those who watch for cross&up-sell opportunities

Agents are most efficient in cross-selling and upselling


WHO WILL WIN?

Those who get the proper support from the insurance/pension company


WHO WILL WIN?

Those who focus on long term high quality growth rather than commission-driven sales


LESSONS - TURKEY:

Do not put content on the brand signature area Jetse Frederik de Vries CEO INTERMEDIATION in the TURKISH LIFE INSURANCE and PENSION MARKET.

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