The Turkish insurance market grew in 2013 driven by strong economic growth, urbanisation and an expanding middle class, Fitch Ratings said today.
Its non-life market made a strong profit of TRY768m (260m) in 2013 after four years of poor results. The improvements were driven by hardening rates in motor prices, a reduction in reserve strengthening and improved investment returns, according to the ratings agency.
The Turkish life market also saw an increase in profits with an average annual profit growth of 13% between 2008 and 2013 and profits of TRY462m (157m) in 2013.
Fitch said strong premium growth was buoyed by strong credit growth in Turkey. However, the ratings agency said this would be tempered in 2014 as some adverse effects from economic readjustments could feed into insurers' results.
Despite this, regulatory solvency is strong and Fitch said Turkey's life markets had sufficient capital to withstand shock in the near term.
In addition, assets under management in Turkish pension schemes trebled in the past five years to TRY25bn (8.41bn). Since the start of 2013, the government has added 25% to pension contributions to encourage saving. This would create an expansion of the pension market, Fitch said.
