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The Insurance chapter examines Turkey’s relatively small insurance market, which has seen steady growth with the expansion of the nation’s GDP. The sector is dominated by banks, which provide the most accessible outlets for customers. The sector is extremely crowded and very competitive, which has made it difficult for insurers to grow their business. Despite the challenges, however, gross written premiums increased some 21.5% in 2011, to TL17.2bn (€7.3bn). The sector is dominated by the non-life business, however, the government has expressed its desire to grow the life segment, encourage savings, and thus create a much-needed pool of institutional money to finance current accounts. This could see important changes in the sector in the coming years.

Late 2011 and early 2012 saw dramatic changes in Turkey’s capital markets, with a rebranding campaign for the Istanbul Stock Exchange – to the Istanbul Bourse (IMKB) – as well as the appointment of new leadership. The IMKB was greatly affected by economic instability elsewhere around the world, because many of the markets key investors are foreigners. Under its new leadership, the bourse is focusing on restructuring – possibly as a private entity – and increasing the range of instruments to be used on the exchange. The IMKB is key to plans to make Istanbul a financial centre for the region, and as a new commercial code goes into effect in July 2012, minority shareholders and private equity traders are expecting to see their needs more readily met on the bourse. The chapter contains interviews with Vedat Akgiray, the President of the Capital Markets Board (SPK); Ibrahim Turhan, the Chairman of the IMKB Borsa Istanbul (IMKB); and Ilhami Koc, the CEO of Is Investment. Share analysis and data in the chapter were provided by OBG’s capital markets partner, Is Investment.

The Turkish banking sector learned hard lessons from the country’s financial crisis in 2001-02, and as a result, it was among the most stable and secure through the global financial crisis of 2008, remaining a safe harbour for foreign and domestic investors alike. The sector is very competitive, and profits declined during 2011 on the back of reduced margins from loans, however the stability of the sector remains one of the key elements driving the nation’s overall economic growth. With the nation rapidly developing, online and mobile services have enabled banks to attract more customers while developing adaptive offerings to utilise funds that are in flux. While tightening monetary policy has posed a distinct challenge to banks, they are readily adaptable, and the nation’s vast infrastructure and energy project pipeline offer significants opportunities for long-term returns. The chapter features interviews with Mehmet Şimşek, the Minister of Finance; Central Bank Governor Erdem Başçı; Adnan Bali, the CEO of Iş Bank; Hüseyin Aydin, the General Manager of Ziraat Bank; and Martin Spurling, the CEO of HSBC Turkey.

The Turkish economy rebounded from the global crisis to become an island of economic stability between Europe and the MENA region. The 15th-largest economy globally and the 6th-largest in Europe has experienced an unprecedented transformation in the past decade, as per capita GDP has risen more than three times. While the economy is plagued by a structural current account deficit, due to dependence on foreign energy resources, the nation’s consumer population drove significant GDP growth of 11.9% in 2011, and each of the sectors dependent on consumer spending have seen significant returns. With increased interest in Turkey from the Gulf states and new partners in Africa and Southeast Asia, exporters are finding new alternatives to crisis-plagued Europe, ensuring the growth of foreign trade. The Economy chapter contains interviews with Ali Babacan, the Deputy Prime Minister responsible for the economy; Mustafa V. Koç, the Chairman of Koç Group; Hüsnü Özyeğin, the Chairman of FIBA Holding; and Jim O'Neill, the Chairman of Goldman Sachs Asset Management.

The nation’s efforts over the past decade have seen slow progress on its bid to join the EU, however, Turkey has become vastly more prominent on an international scale. While still hamstrung by the Kurdish issue, the country’s “Good Neighbour” policy has made it a key partner in engagement with Western powers. Internally, the AKP is credited with providing the stability that has ushered in Turkey’s economic success in the past decade, and it is unlikely that the opposition will achieve success in the coming years without cooperation with the leading party. The Politics chapter contains interviews with Recep Tayyip Erdoğan, the Prime Minister of Turkey; Ahmet Davutoğlu, the Minister of Foreign Affairs; Rifat Hisarcıklıoğlu, the President of the Turkish Foreign Economic Relations Board (DEİK); and Joe Biden, the Vice-President of the US.