Analysis of the Turkish insurance market from S&P Global Ratings

According to the "Insurance Sector and Country Risk Assessment: Turkey Property/Casualty Insurance" analysis by the international rating agency S&P Global Ratings, the return on equity in the property and casualty insurance market in Türkiye has been consistently above 40 percent in the last 3 years.

It is estimated that this trend will continue and return on equity will remain above 30 percent for the next 2 years as inflation decreases and banks loosen interest rates.

While expectations regarding premium growth supported the profitability of the sector, the strong income growth of the insurance market in the 2023-2025 period was above inflation. This growth was influenced by the new business volume that occurred after the Kahramanmaraş-centered earthquakes in February 2023, and the continuous increases in policy premiums in response to inflation and increasing insurance coverage.

According to S&P Global Ratings, Turkish insurance companies provide products that maintain their value in real terms by offering insurance policies indexed to inflation and denominated in foreign currencies, which helps maintain the value of insurance premiums and coverage provided to policyholders despite high inflation and exchange rate depreciation.

Although premium growth has lagged slightly behind inflation as price increases have gradually slowed this year, this is not expected to negatively impact the profitability of property and casualty insurers.

As Türkiye enters a disinflationary period, nominal premium growth is expected to decline to 20-25 percent in the 2026-2027 period, and inflation will drop to 19 percent in 2027.

According to the analysis, insurance sector risk in Türkiye is at a moderately low level.