An improvement in the European business environment and a low penetration rate will support growth at a compounded annual growth tate of 9.8% to 2017.
Turkey's location makes it prone to earthquakes. The Turkish Catastrophe Insurance Pool was established in 1999 to deal with risks from natural disasters. Compulsory earthquake insurance was introduced in 2008.
Other mandatory insurance products include professional liability insurance for doctors and compulsory insurance purchased from an insurer for protection against the claims of another party (third-party liability insurance) in 2010. Further amendments to catastrophic insurance law and private sector investment are expected to expand the coverage of compulsory insurance up to 2017.
A low insurance penetration rate of 1.35% in 2012, compared to the European average of 7.6%, is expected to attract interest from foreign insurers. A low penetration rate in Turkey signifies an attractive opportunity for new insurance products and businesses.
International companies have positioned themselves in the Turkish insurance industry to take advantage of the growing economy. For instance, Belgian insurer Ageas, through a partnership with domestic insurer Sabanci, entered the Turkish non-life insurance segment in 2011.
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TURKEY: Insurance market ripe for foreign investment