Türkiye: High reinsurance premiums are inevitable in 2024
Source: Middle East Insurance Review | Nov 2023
Reinsurance premiums have been raised due to the increasing natural disasters all over the world, which include the 6 February Kahramanmaras earthquake in Türkiye, according to Mapfre Sigorta general manager Erdinç Yurtseven. The increases will also be reflected in policy premiums in 2024.
It is predicted that catastrophic risks such as earthquakes and floods will challenge insurance companies in 2024, reported Sigorta Medya quoting Mr Yurtseven.
He said, “The supply of protection on the reinsurance side is not infinite and has a certain capacity. The inflationary environment experienced in the world in 2022, the resulting losses in the insurance/reinsurance sector, the increase in the number of natural disasters and the compensation paid for them have caused a contraction in reinsurance capacity and with this, significant increases in prices have occurred.
“On top of all these, the earthquake disaster that occurred in our country in February 2023 and the compensation paid by reinsurance companies as a consequence will also create an additional problem in terms of capacity and increasing costs in our country.”
He said, “We may also see limitations on the maximum amounts that reinsurance companies will accept to pay in a single event, such as an earthquake, for the risks that companies transfer to reinsurance.”
Speaking about the effect of the earthquake on Mapfre Sigorta, he said, “Thanks to the catastrophic protection we received, the impact of the earthquake on our company’s financial statements was limited.” M