Turkey Insurance Report Q2 2016
BMI View: Turkey is among the more dynamic insurance markets we monitor, with the sector offeringsubstantial long-term potential and substantial opportunities for new entrants and investors. While certainlines, namely the compulsory motor vehicle and property segments, are well established, many areas of themarket remain underdeveloped. The health and personal accident insurance lines, in particular, should bewell placed to grow over the forecast period and will be supported by a robust economy and growth inhouseholds incomes and consumer spending. Relatively fragmented at present, we expect to see increasedconsolidation and transactional activity over the next few years as the larger players expand their presenceand foreign insurers look to gain a foothold in the market.
Key Updates And Forecasts
We have revised our forecasts for life and non-life premiums upwards this quarter to reflect a steadilyimproving business and consumer environment following the recent general election. We forecast lifepremiums to grow by 10% In 2016 to TRY4.0bn, while non-life premiums will rise by 9.9% toTRY27.4bn.
Turkey's regulatory environment continues to strengthen and November 2015 saw the introduction ofnew regulation which laid out the rules for insurers outsourcing ancillary functions that are not central totheir core insurance operations.
However, Turkey's motor vehicle insurers are facing increasing pressure to cap compulsory insurancepremiums for commercial drivers. In October 2015, the Turkish Drivers and Automobile Federationlamented recent rises in compulsory premiums and called for the government to intervene in the settingof prices for obligatory policies.
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