Turkish Insurance Industry
by Sezi Meric, Milli Re
Contents
 Market History
 General Market Conditions
 Role of Foreign Capital
 Turkish Reinsurance Market
 Future Outlook
 Milli Re
The History of the Turkish Insurance Market
Market History
Market Overview
Foreign Capital
Reinsurance
Market
•
The first developments regarding insurance activities in Turkey were
seen following the big fire which occurred in Istanbul in 1870.
•
The pioneering insurance companies established in Turkey (during
the Ottoman times) were the agencies of the English and French
companies (Sun, Northern, North British, La Fonciere).
•
The first Turkish capitalized insurance company was established in
1918.
Future Outlook
Milli Re
Market History
The History of the Turkish Insurance Market
Market Overview
Foreign Capital
Reinsurance
Market
Future Outlook
Milli Re
2005
2006
2007
2008
2009
Non-Life
32
32
35
36
36
Life –
Pension
11
11
10
12
12
Life
10
10
14
12
11
2
1
1
1
1
Reinsurance
Turkish Insurance Market: a brief overview
Market History
Market
Overview
Foreign Capital
Reinsurance
Market
Future Outlook
Milli Re
Premium Production
TL
Branches
2007
2008
2009
Share (%)
1.482.841.577
1.596.779.128
1.670.810.100
13,43
364.887.256
413.600.680
374.352.036
3,01
Accident (*)
3.574.502.835
3.330.869.728
3.237.041.576
26,02
Motor TPL
1.650.517.911
2.062.285.306
2.249.245.391
18,08
523.356.482
535.217.981
623.890.948
5,01
95.331.476
125.111.095
151.119.651
1,21
1.217.976.563
1.326.125.505
1.415.189.392
11,37
39.216.024
32.412.600
36.028.946
0,28
400.666.470
467.501.881
505.591.674
4,06
13.784.873
40.944.611
28.436.157
0,22
Non- Life Total
9.597.468.685
10.203.673.199
10.614.317.698
85,35
Life
1.412.198.649
1.576.208.875
1.821.653.559
14,65
11.009.667.334
11.779.882.075
12.435.971.258
100,00
Fire
Marine
Eng.
Agriculture
Health
Legal
Protection
Pers.Acc.
Credit
G.Total
(*) Including Motor Own Damage
Market History
Market
Overview
Foreign Capital
Reinsurance
Market
Future Outlook
Milli Re
Premium Production vs. Annual Growth
Market History
Market
Overview
Turkish Insurance Market: a profitability check
* Including both life and non-life branches.
Foreign Capital
2007
2008
2009
447.558.788
481.931.039
217.007.460
11.009.667.334
11.774.219.813
12.435.971.258
4,65
4,10
1,74
Reinsurance
Market
Future Outlook
Profit (TL)
Milli Re
Premium
(TL)
(%)
Branch
Loss Ratio
Market Share
Accident (including M.O.D)
90%
26%
MTPL
92%
18%
Health
92%
11%
91-92%
55%
Total
Profit / Shareholder‘s Fund Ratios
Market History
Market
Overview
Foreign Capital
2007
2008
2009
447.558.788
481.931.039
217.007.460
Shareholde
r’s Fund
(TL)
6.848.092.633
7.021.692.161
8.821.077.683
Profit/
Shareholde
r’s Fund
(%)
6,53
6,86
2,50
Reinsurance
Market
Future Outlook
Milli Re
Profit (TL)
Market History
Market
Overview
Foreign Capital
Reinsurance
Market
Future Outlook
Important Insurance Organizations in the Market
TARSIM: Agricultural Insurance Pool
Insurance Data Center
TRAMER
Milli Re
TCIP: Turkish Catastrophe Insurance Pool
Earthquake insurance for dwellings became compulsory after 1999
earthquake in the Marmara region. The main objectives of TCIP
are:
• To provide an earthquake insurance cover for dwellings in
return for an affordable premium
• To reduce or mitigate the financial burden of potential
earthquakes suffered by the State, by spreading it to the
international financial and reinsurance markets
• To make contribution in developing insurance awareness in the
society.
Market History
Foreign Capital Development in the Market
Market Overview
Foreign Capital
Reinsurance
Market
Future Outlook
Milli Re
No. of Foreign Capital Companies
Non-Life Companies
Life / Pension Companies
2005
2006
2007
2008
2009
20
24
35
41
43
11
14
19
22
24
9
10
16
19
19
2005
2006
2007
2008
2009
16,81%
23,00%
38,09%
51,37%
54,98%
Non-Life Companies
13,64%
19,00%
38,10%
51,20%
55,40%
Life / Pension
Companies
24,85%
34,85%
38,07%
51,92%
54,76%
Foreign Share in Paid-up
Capital
Turkish Reinsurance Market (Premium Ratio)
Market History
2009
million TL
Market Overview
Foreign Capital
Reinsurance
Market
Future Outlook
Milli Re
Branches
Fire
Market Insurance
Premium
Market Reinsurance
Premium
Market Reins. Prem. Ratio.
in %
1.671
952
57.00
374
183
49.00
Accident (*)
3.807
720
18.93
Motor TPL
2.249
333
14.82
Engineering
624
424
68.00
Agriculture
151
128
85.40
1.415
268
19.00
10.291
3.011
29.25
Marine
Health
Total
(*) Including Motor Own Damage, Personal Accident, Legal Protection and Credit.
Turkish Reinsurance Market in Brief..
Market History
Market Overview
Per Risk Protection in General
Foreign Capital
Reinsurance
Market
•
Currently 23 companies employ proportional reinsurance protection
for the risks they have written.
•
On the other hand, the number of the companies that have excess
of loss protection on gross account basis is only 4.
•
Milli Re being the leader of 13 of the proportional treaties, working
on bouquet basis, holds a 25% share within proportional reinsurance
premium of the market.
Future Outlook
Milli Re
Market History
Outlook for 2010..
Market Overview
Foreign Capital
Reinsurance
Market
Future Outlook
Milli Re
• Despite the Global Economic Crisis, Non-Life premiums rose by nearly
13% in Q1 2010.
• A number of regulatory initiatives have acted as a catalyst for the
development of the insurance industry:
• authorities are implementing more compulsory insurances
• encourage strong reserving, correct and appropriate
reinsurance purchasing, and credit risk control
Market History
Outlook for 2010..
Market Overview
Foreign Capital
Reinsurance
Market
Future Outlook
Milli Re
• Companies are forced for stricter financial compliance (Auditors,
Shareholders, Regulatory Bodies)
• Trend of increased foreign investments/take-overs, consolidation
expected in the coming years.
Milli Re
Market History
Market Overview
Foreign Capital
Reinsurance
Market
Future Outlook
Milli Re
Corporate Profile
• Est. in 1929 as the World‘s first and only private company to operate
compulsory reinsurance for each insurance branch & promote the
development of the Turkish Insurance Market.
• Run the compulsory reinsurance system in all lines of business until
31.12.2001.
• Actively started writing business from emerging markets as from
01.01.2006.
Financial Strength Ratings
• A.M. Best
11.08.2009
B++ (outlook stable)
• Standard & Poor‘s
24.02.2010
tr AA
Milli Re
Market History
Market Overview
Foreign Capital
Reinsurance
Market
Future Outlook
Milli Re
Key Figures (2009)
• Gross Premiums:
$547 Million
• Paid-Up Capital:
$256 Million
• Assets:
$1 Billion
• Net Profit:
$59 Million
Portfolio Mix
Sezi Meric (Area Underwriter)
T: +90 212 231 47 30/ext. 1261
smeric@millire.com
F: +90 212 246 16 08
www.millire.com