Data from the Turkey Insurance Association show that the gap between the total own-damage motor premium that insurance companies produce and the compensation they pay is narrowing.
Motor statistics are very important for the sector as vehicle own-damage and compulsory third party liability insurance constitutes 41% of the insurance market's total premium. In the first six months of this year, GWP for mandatory motor third party liability insurance grew by 32.5% to TRY7.74bn ($1.21bn) while motor own damage insurance premiums rose by 13.2% to TRY3.71bn.
Statistics for own-damage motor insurance for the first half of the following years are:
||Premiums (MAD m)
|Compensation (MAD m)
In the first six months of 2016, premiums and compensation paid both increased by 15% over the corresponding period in 2015. In 1H2017, premiums rose by 7% while compensation increased by 8%. In the first six months of 2018, premiums increased by 13% but compensation soared by 29%, reports Insurance Gazette.
Moreover, in 1H2018, it is noteworthy that the premium increase was below the inflation rate whereas the increase in compensation paid exceeded the inflation rate. The increase in claims expenses was due largely to the weakened exchange rate. According to calculations made in April, the increase in the cost of spare parts was 18% compared to the previous year. The Turkish lira has slumped 40% against the dollar so far this year. The Turkish consumer price inflation exceeded 10% during the first six months of the year. It reached 15.39% in June, the first time the rate exceeded 15% in almost 15 years.