The Turkish insurance sector is looking forward to 2020 as the industry has been performing above expectations so far this year in spite of low economic growth and the momentum is expected to continue.
Total premiums for the first 10 months of this year surged by 24% to TRY54.4bn ($9.5bn), with real growth of 35.5% in the life branch and 11% for non-life, reported Insurance Gazette.
Sales of new vehicles, though well below expected levels in 2019, support expectations that 2020 will see a more positive trend. A fall in the inflation rate and the improvement in economic indicators support forecasts that the insurance sector will perform better next year than this year.
The establishment of the new Insurance Regulation and Supervision Authority (SDDK) is expected to lead to rapid decision-making in the sector and contribute to growth. In addition, the creation of Turkish Reinsurance company will meet many needs of the sector if it is well managed.
Mr Yavuz Olken, CEO of AXA Insurance, said, “We believe that the SDDK will ensure that significant steps are taken both in terms of insurance awareness and strengthening of financial structures.”
With the country's economy forecast to grow at around 5% in 2020, sector representatives predict that growth in the insurance sector will be around 20% next year. In 2018, the economy was hit by a plunge in the value of the lira and high inflation that continued into 2019.
Turkey's economy is rebounding from recession thanks to supportive policies and a weak base from last year. Economic growth turned positive in the third quarter after three quarters of contraction, notes ING Group, a Dutch multinational banking and financial services corporation.
Halk Sigorta general manager Bulent Karan said that 2019 was a difficult year but recovery started in the second half of the year. “We can see real growth of 10%,” he said, as he believed that the Turkish economy in 2020 will regain significant growth momentum.
Doga Sigorta general manager Coskun Golpinar said that motor vehicle insurance will continue to be the decisive class of business.
He added, “We need to focus on the needs of SMEs. While the share of SMEs in the total number of enterprises is 99%, the insurance coverage among these establishments is 15%.”