The Turkish insurance sector had a weak start to 2026 and the US-Israel-Iran military conflict has aggravated the situation, forcing the insurance industry to recalibrate its expectations for the year.
According to data released by the Insurance Association of Turkiye (TSB), the sector grew by 30.7% in the first two months of this year, which, when adjusted for inflation, contracted by 0.6% in real terms. In the non-life sector, which grew by 28.1%, the real change in premium production was -2.6%, reported Insurance Media.
At the start of 2026, industry players had expected the sector would have a profitable year despite slower growth, largely because of investment income.
At this point, however, insurers are now united in the view that 2026 will be an even more difficult year than 2025. The increase in inflation, fuelled by rising crude oil prices because of the war, is expected to lead to bigger losses in the insurance sector and negatively impact many branches.
At a media conference held by Ray Sigorta on 26 March, Ray Sigorta CEO Koray Erdogan shared his expectations for 2026, saying, “While we were actually expecting a downward trend in interest rates this year, because of recent events, we may see a change in interest rate policy in the coming period. It seems possible that interest rates will remain at their current levels, and inflation will close the year above 30%.
"Currently, no one can predict where this situation will lead. If it becomes more prolonged, we will, of course, monitor its effects accordingly. Turkish companies, especially in marine insurance, do not face a very high risk. However, as the process lengthens, we may feel the indirect effects of these uncertainties to some extent across all branches.”