Expectations for Turkey's Insurance Sector According to S&P Global Ratings
International agency S&P Global Ratings has shared its analysis on profitability and premium growth in Turkey's property and casualty insurance market.
According to the insurance sector analysis published by S&P Global Ratings, return on equity in Turkey's property and casualty insurance market is projected to remain above 30 percent over the next two years.
Return on Equity Expectation
According to S&P Global Ratings' analysis, return on equity in Turkey's property and casualty insurance market has consistently stayed above 40 percent over the past three years. This strong trend is expected to continue, with profitability projected to hover above 30 percent for the next two years. Falling inflation and the easing of interest rates by banks will play a role in this process.
Factors Supporting Revenue Growth
The insurance market's strong revenue growth during the 2023-2025 period outpaced inflation. This growth momentum was driven by new business volumes generated following the Kahramanmaraş-centered earthquakes in February 2023, alongside continuous increases in policy premiums in response to inflation and rising insurance coverage.
Inflation and Currency-Protected Products
Turkish insurance companies provide products that maintain their real value by offering inflation-indexed policies denominated in foreign currency. This practice significantly helps protect the value of insurance premiums and the coverage provided to policyholders despite high inflation and currency depreciation.
Future Growth Projections
With price increases gradually slowing down this year, premium growth is expected to lag slightly behind inflation. However, this situation is not anticipated to negatively impact the profitability of property and casualty insurers. Nominal premium growth is expected to decline alongside the disinflationary period.