Having concluded five key acquisitions worth over $800m, Groupama is one of Turkey’s largest foreign investors. Generally preferring to grow through acquisitions in Europe, the company started its operations in Turkey in 1991 with the purchase of a 30 percent share of Günes Sigorta, one of the top five non-life insurance players; subsequently increasing its share to 36 percent. In 2006 Groupama acquired Ziraat Bank’s captive insurance companies Basak Sigorta (non-life) and Basak Hayat and Emeklilik(life and private pension), two of the leading non-life and life insurance players, from the Privatisation Agency. In 2008 Groupama acquired Güven Sigorta and Güven Hayat from Agricultural Credit Cooperatives. In 2010 the acquisitions were merged as “Groupama” Insurance and Groupama Life & Pension Inc. under one brand and single management. Since then major restructuring activities have been carried out to merge these acquired entities for sustainable and profitable growth. With all these investments, Groupama Turkey has become one of top 10 foreign direct investors in Turkey.

Leading turkey’s insurance sector
In 2011, Groupama grew 20 percent in non-life insurance, reaching $487m premiums; in life insurance growth was 61 percent, reaching $45.2m life premiums; and in private pension savings, Groupama generated contributions of $92.3m and reached funds under-management of $361m. The number of policies in life and non-life insurance reached over five million. On a consolidated basis, Groupama Turkey reached total premiums, contributions and fund size of about $1bn. As a result Groupama Turkey has become the fourth largest operation of Groupama after France.

Groupama Turkey’s CEO Yılmaz Yıldız emphasised that one of Groupama’s most valuable characteristics is that the company is the largest independent non-bank insurance provider with a multi-product and multi-channel approach with one of the highest growth rates and one of the lowest expense ratios in the market. Believing that this is extremely important for profitability and sustained growth, Yıldız states that Groupama’s long-term goal is to become Turkey’s leading insurance company.

Largest agent network
With close to two thousand private agents and another two thousand agricultural cooperatives, Groupama has the widest agent network with almost four thousand physical sales points. Furthermore it has 250 direct-sales force for pension and health products, distribution agreements with five banks with over 1000 branches and the internet and call centre platform. Seventy percent of the company’s agent distribution is situated outside of Turkey’s three largest cities – Istanbul, Ankara and Izmir providing it a wide distribution capability. Especially strong in agricultural insurance in rural regions with its small and mid-sized agents, Groupama directly and indirectly employees twenty thousand people in Turkey.

Leadership in agricultural insurance
With 100 years of experience in agricultural insurance, Groupama has become the leader of Turkey’s agriculture insurance market with about 40 percent market share. Due to its owning of the largest distribution network in the agricultural sector, Groupama is capable of reaching producers even in the most remote areas, specifically via Agricultural Credit Cooperatives and the agent network. Almost one out of two farmers is insured by Groupama and 70 percent of all agricultural entities registered in the Ministry of Agriculture are Groupama customers.

Moreover, Groupama has pioneered, with the partnership of Agricultural Credit Cooperatives, the first ever private pension product for the farmers, which became a big success.

Groupama’s executive team has deep knowledge of insurance, banking and similar service sectors. Furthermore, executives posses wide range of experience in post-merger integration, restructuring and growth strategies, which help develop Groupama operations much faster and efficiently.

Insurance sector’s big potential in Turkey
According 2010 official data, Turkey’s insurance premium production comprises 1.3 percent of GDP. Premium per capita is only $128, which is approximately six times less than European and similar emerging market benchmarks. Yılmaz Yıldız says: “The insurance sector’s current premium per capita and total premium production to GDP are far behind those of similar countries. These numbers not only show the potential of Turkey’s insurance sector, but are also an important indicator of its large potential.

To reach this true potential it is essential to have more people insured. For more people to become familiarised with insurance products, reaching these wide audiences through a broad distribution network along with simplified and correctly priced products carries great importance. Steps taken by the insurance sector regulator, Undersecretariat of Treasury, over the past five years have had a positive effect in growing and strengthening the sector.”

Insurance market growing substantially
Noting that the insurance sector provides further added value to the fast-growing Turkish economy and foreign trade, Yıldız continued: “In the past 10 years, during which the high economic growth was sustained, insurance sector exhibited a seven-fold increase. By 2011 total insurance sector premiums had reached about $20bn: roughly $9bn is non-life, $9bn is pension funds and $2bn is life insurance. In 2012, for the first time pension fund volume will surpass non-life premium production.

The private pension system was initiated in 2003 as a voluntary system complementing the state’s mandatory social security system. In the eight years since its inception, it started from zero and reached 2.7 million customers, 10 percent of the Turkish workforce, and funds under management of $9bn with an average growth rate of 35 percent per annum. It is projected to reach $180bn in 10 years.

One of the largest in turkey
Groupama is the largest independent private pension company in Turkey with no links to any banking or financial group. Aiming to grow in individual savings by focusing on different occupations and job categories, Groupama’s goal is to keep customer satisfaction high. In planning for individuals and groups, the company aims to keep optimum fund performance balancing returns with acceptable risk levels appropriate for customers’ risk profiles. Having completed in 2010 and 2011 the strengthening of its infrastructure and a series of reorganisations, Groupama now plans on becoming more effective in private pension products. Groupama takes prominence with the exclusive services provided to its five million customers as of the end of 2011 in pension, life and non-life business branches.

Offering innovative products
Noting that in parallel to the country’s economic development, the public’s understanding of the importance of the insurance sector has improved considerably, Yılmaz Yıldız continued: “We pay careful attention to customer satisfaction to ensure our customers are highly satisfied not only when purchasing our products and  services, but also when risks are realised. When you are a company that is easily accessible, provides good service, offers correct pricing as well as balances its portfolio and possesses expert staff, it is natural that the success rate will increase.”

Emphasising that the private pension system has demonstrated impressive development despite the fact that it is a relatively new practice in Turkey, Yılmaz Yıldız continued: “We are working tirelessly to increase our market share by offering innovative and distinctive products within this sector. We are continuing to grow rapidly despite the insurance sector in Turkey is still in the development phase. Turkey, with its strong growth and potential, is at the forefront as a country offering a promising future. We believe that our international experience and professionalism will make us a dynamic player in the sector.”

Social responsibility in every aspect of life
Groupama has focused its social responsibility projects in two areas. The first is culture and arts with the project “Turkish Classics Re-generated”; restoring classic old Turkish films into their originals and organising public to watch them to contribute to Turkish cultural heritage. With this project Groupama has undertaken the restoration of four famous Turkish classic movies: Erden Kıral’s “Bereketli Topraklar Üzerinde” (On Fertile Grounds) in 2008, Atıf Yılmaz’s “Selvi Boylum Al Yazmalım” (The Girl with the Red Scarf) in 2010 and Memduh Ün’s “Üç Arkadas” (Three Friends) in 2011.

Groupama is also generating creative projects to help improve Turkey’s primary education system. Yılmaz Yıldız, went on to state: “The best guarantee for our society’s future comes from our children’s education. In a market economy the best way to improve equality in the society is through improving education quality and providing equal access to good education. When academic success rates of schools in Turkey are examined, we see there are big differences not only among different schools, but also among students within same schools. To help solve this problem, we have started the “Success Everywhere” project with TED, Turkish Education Association, and the Istanbul Provincial Directorate for National Education. This project aims to improve the inequalities in academic success rates in primary schools.

Through two pilot schools, the project investigates the root causes of students’ academic performance deficiencies and how to remedy them through teacher, parent, student trainings and motivational/academic programmes. In the first phase, elements causing low success rates in these schools will be determined and data will be collected for an implementation plan. The action plan that will be developed in light of the information that is collected will then be implemented in the second phase. At the end of the project, Groupama aims to generate an improved ‘education model’ that can be applied to other parts of Turkish primary education system.”