Ergo Insurance Group acquired 75 percent of İsviçre Sigorta from Turkey’s Avrupa Holding in 2006 and bought the remaining 25 percent of the firm’s shares in 2008.

“Our name will change from Ergoİsviçre to Ergo on April 26 when we will also launch a new corporate image throughout the world. Turkey will be the first market where we launch the new name,” Akın Kozanoğlu, chief executive officer of Ergo Turkey, said.

The group currently has some 40 million customers in more than 30 countries and employees about 50,000 people.

Ergo expects a 15 percent nominal growth of business volume in Turkey over the current year, Kozanoğlu said. “If we look at the figures of the first three months of this year, the sector has already grown by some 10 percent. From now on this year, we will see nominal growth of 10 to 15 percent, which will mean real growth of about 2 to 6 percent,” he said. “After 2011, we expect real growth of some 8 to 10 percent.”

Focus on organic growth

The company’s short-term growth strategy in Turkey will focus on organic growth, increasing consumer awareness and changing its portfolio structure. However, further expansion through an acquisition is not off the table. “We are going to follow a policy of more rapid growth in health and fire insurances in the next three years,” Kozanoğlu said. “At a later stage we will of course evaluate potential acquisition targets in case they suit our brand and are suitably priced. After all, we have the financial strength to do so.”

Dr. Thomas Baron, general manager of Ergo Sigorta, noted that the firm is keen to reduce risk. “Profits in the traffic insurances segment went down radically over the last year. We want to have a more balanced risk in the portfolio and expect to have important growth - of some 15 percent - in health and fire insurances, while there will be a reduction in traffic and car insurances,” Baron said.

Kozanoğlu said the low insurance penetration rate in Turkey, at approximately 1.2 percent of the country’s gross domestic product, means foreign players will continue to find the market attractive. “Insurance penetration in Turkey stands at 1.2 percent of the GDP while in European Union countries it is around 8.3 percent of GDP. When a strategic planning director [of a foreign insurance group] sees these figures, he says, ‘Let’s enter the Turkish market.’ The market potential is the reason for foreign firms to enter Turkey,” he said.