Turkiye:Non-life sector drags down insurance industry in Jan-Jul period

Turkiye's insurance sector continues to contract in real terms in the first seven months of this year, according to data released by the Insurance Association of Turkiye (TSB).

Data for the January-July period show that the overall insurance industry grew nominally by 28.4%. However, taking inflation into account, premiums contracted by 2.5% in real terms, according to an analysis by Sigorta Medya.

The situation was driven by the non-life sector, where premiums grew by 25.7% in nominal terms while, in real terms, they fell by 4.6%. In contrast, the life insurance branch grew by 45.4% nominally (10.4% in real terms).

There are several reasons for the contraction in the sector. The first factor is soft market conditions. In 2025 and 2026, price-based competition, particularly in the non-life sector, drove prices down in many branches, contributing to the real contraction of the sector. The second factor is that, as a result of price-based competition in the sector, prices are declining and premium increases remain limited.

The number of insured individuals and policies is falling in certain branches. It is noteworthy that the increase in the number of insured individuals in Supplementary Health Insurance (TSS), which is increasingly important in the sector's premium production, lagged significantly behind 2025 during the first seven months, while there were decreases in the number of policies in fire, natural disaster, and motor insurance branches. Another consideration is the negative effects of the tension created by the US-Iran war, increasing geopolitical risks, and volatility in financial markets on consumer behaviour.

Profit in non-life insurance sector

According to the latest statistics released by the TSB for the first half of the year, despite the real contraction in the non-life branch, technical profit jumped by 13.3% to TRY75.6bn. The increase is attributed to investment income amounting to TRY121bn that was transferred from the non-technical section.

This suggests that excluding the transferred investment income, the sector would have recorded a technical loss of approximately TRY45.4bn.