STATISTICS: TURKEY, 1H2021: High inflation and local currency's depreciation affected the otherwise very good performance of the market

7 October 2021 — Daniela GHETU
The impact of the Turkish Lira devaluation on the insurance market's results was quite significant in 1H. While the market showed a 17.11% y-o-y GWP nominal growth, to TRY 47.1 billion in local currency, the GWP volume denominated in Euro actually decreased y-o-y.

In Euro, the market totaled EUR 4.55 billion in GWP, almost 13% less y-o-y. Property insurance, health insurance and motor insurance lines were the main contributors to the market growth, as reflected by the figures in local currency.

"The pandemic period was a period when we proved our maturity. We continued our activities without interruption. In this process, there was a significant increase in health insurances, especially in complementary health insurances. Our companies continue to be the most important business partner of our citizens who use banks and credits in all developments in the finance and credit market," Atilla Benli, President of the Insurance Association of Turkey recently stated.

On the paid claims side, insurers' expenses with claims increased by 36.34% y-o-y in local currency, to TRY 19.9 billion, 60% of the paid claims' increase coming from the motor insurance lines, most probably as an effect of the galloping inflation. Health insurance was the second largest sources of the expenses with claims increase, an evolution to be expected in the conditions of the pandemic.

In the first half of 2021, TCIP has paid compensations worth TRY 18.11 million (approx. EUR 1.75 million) for a grand total of 1,275 claims. Since its inception, 20 years ago, TCIP has paid a total of TRY 783.2 million (~ EUR 200 million considering the exchange rate variation).

GWP worth TRY 16.07 billion were written by the Turkish insurers for the motor insurance lines in 1H2021, which is 14% up y-o-y in local currency. Yet, when denominated in Euro, GWP amounted to EUR 1.55 billion, which is by about 15% less y-o-y.

Claims paid for motor insurance contracts went up y-o-y by 45.6% in local currency, recording a 8% increase rate even when denominated in Euro, which means that besides the Turkish Lira depreciation there were also other factors contributing to this trend. In relative terms, the highest growth rate was recorded by the claims expenses for Motor Hull contracts (66.8%).

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