Fitch Ratings has said that the Turkish insurance market is growing strongly, driven by economic development, favourable demographics, urbanisation and an expanding middle class.
The Turkish non-life market made a profit of €260 million in 2013 after four years of poor results.
The life market in Turkey has reported steadily increasing profits with an average annual profit growth of 13 percent from 2008 to 2013 and profit of €155.4 million in 2013.
Strong premium growth has been buoyed by strong growth in credit in Turkey but Fitch believes that this will be tempered in 2014 as some adverse effects from economic readjustment could feed into insurers' results.
However, regulatory solvency is strong in Turkey and Fitch considers the life market to have sufficient capital to withstand shocks in the near term.
Turkish insurers have benefited from a period of political stability and policy decisions and incentives that have encouraged savings and the use of insurance.
Any political instability, breakdown of order, corruption, widespread fraud or significant policy change, especially after the presidential election in August 2014 and general election in June 2015, could have a detrimental effect on the insurance sector and threaten solvency if asset prices fall.
