The insurance market was profitable in 2019, according to data released by the Insurance Association of Turkey (TSB). The total technical profit chalked up by the industry last year stood at TRY7.75bn ($1.14bn), a jump of 52% over 2018.
The non-life sector posted a technical profit of TRY5.03bn in 2019, a surge of 54% over the previous year, reported the newspaper Sabah. The life sector reported a technical profit of TRY2.25bn.
Casco insurance (TRY1,866.5m) was the most profitable non-life branch, followed by accident (TRY1,231.7m), health (TRY1,028.3m), fire and natural disasters (TRY835.2m), and general damage (TRY523.1m).
Compulsory motor TPL business was affected by the cap on premium rates. This class posted the highest loss compared to other classes of business, with the loss standing at TRY903.3m last year, an increase of over 10% compared to TRY808.7m in 2018.
Factors contributing to profitability
In recent years, in addition to an overall increase in premium income in real terms, insurers have been attaching importance to technical profit and were cautious in risk selection.
Another factor behind the higher profit last year was investment income transferred from the non-technical department. The amount transferred from the non-technical department increased by 18% in 2019 to TRY6.65bn, compared to the previous year.
Turkey’s non-life sector has been operating profitably for the last four years.
The insurance market, though, has begun to feel the effects of the coronavirus pandemic in several classes of business. Sales in some classes declined in March. It is expected that a fall in the number of traffic accidents will help mitigate the fall in premium income faced by insurers. M
TRY1 = $0.15