News Middle East07 Apr 2020

Turkey:Insurance industry continues to post profits in 2019

07 Apr 2020

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 ($1.15bn), 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 whereas the life sector reported a technical profit of TRY2.25bn, reported the newspaper Sabah

Casco insurance was the most profitable non-life branch.

However, compulsory motor third party liability 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.

The five most profitable non-life branches in 2019 were:

Factors contributing to profitability

In recent years, in addition to an overall increase in premium income in real terms, insurance companies have been attaching importance to technical profit and were cautious in risk selection.

Class

TRY m

Casco

1,866.5

Accident

1,231.7

Health

1,028.3

Fire and natural disasters

835.2

General damage

523.1

 

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. 

2020

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 decrease in the number of traffic accidents will help mitigate the decrease in premium income faced by insurance companies.

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