Turkiye's insurance sector's net profit for the period increased by 63% nominally to TRY168bn in 2025, while the real increase was 25%, notes the global professional services firm KPMG.
In its “2026 Insurance Sector Outlook” report, KPMG says that this performance clearly demonstrates the profitability transformation the sector experienced in the last three years: net profit, which was TRY19.7bn in 2022, reached TRY71bn in 2023 and TRY112bn in 2024, and TRY168bn in 2025.
In addition, according to 2025 data, total premium volume reached TRY1.22tn in Turkiye in 2025, representing growth of 46%. In the first quarter of 2026, premium production reached approximately TRY400bn, representing an annual increase of around 30%. While this rate indicates a slowdown compared with the 46% increase recorded in 2025, it nevertheless points to the continuation of the sector’s strong growth trend, said the report.
Mr Ali Tugrul Uzun, a Partner in Audit and Assurance Services and Insurance Sector Leader at KPMG Turkiye, said, “The Turkish insurance sector demonstrated strong performance in 2025 in terms of both premium production and profitability. Gross premium production exceeding TRY1.2tn and continued real growth indicate that the sector is growing genuinely, not just due to inflation. However, the fact that per capita premium production in Turkiye is $340, significantly below the global average of $970, shows that the sector still holds significant penetration and growth potential.
"In the coming period, realising this potential will depend on developing products better suited to customer needs, expanding digitalisation, data and artificial intelligence usage, and making health, life insurance, and pension products accessible to a wider audience. Maintaining a strong capital and profitability structure while accelerating technological transformation and increasing insurance coverage will be among the most important agenda items for sustainable growth in the coming period.”
Challenges
The report highlights the key structural challenges facing the sector. These are the 156% combined ratio in motor third-party liability insurance, increasing reliance on investment income, aggressive growth in operating expenses, the low share of life insurance in the overall market, and low insurance penetration.
“These challenges indicate that maintaining a sustainable balance in technical profitability will remain a key priority for the sector in the period ahead. In the motor third-party liability segment, revisiting the regulatory framework and restoring pricing discipline stand out as critical policy priorities,” said KPMG
In terms of strategic priorities, investments in technology and digitalisation will continue to be a key determinant of the sector’s competitiveness. Investments in AI-powered underwriting, automated claims management, customer experience platforms, and data analytics offer opportunities for both cost advantages and differentiation. Investment in human capital, particularly in qualified actuaries, data scientists, and cybersecurity specialists, will be of critical importance.
In terms of opportunities, several areas offer tangible growth potential for the sector, including the 32% real growth in supplementary health insurance, the TRY70bn volume of participation insurance, the 147% growth in funds in the private pension system (BES) in the child participant segment, and the additional pool of savings expected to emerge with the implementation of the Complementary Retirement System (TES) in 2026. Next-generation product categories such as ESG-focused products, parametric insurance solutions, cyber insurance, and insurance solutions for the gig economy are also expected to gain market share in the period ahead.
On the external front, catastrophic events driven by climate change, and exchange-rate volatility in the Turkish lira will continue to place pressure on the sector’s operational and financial sustainability. Rising reinsurance costs and tighter international reinsurance capacity will make risk management more complex, particularly in earthquake and natural catastrophe lines.
The report added, “With the implementation of TES, compliance with TFRS17 (the Turkish version of IFRS17), and the maturation of the InsurTech ecosystem, we expect the sector to target a doubling in size within its 2030 vision and to strengthen its position in international comparisons.”