The total catastrophic coverage in the Turkish market is predicted to amount to EUR14-15bn ($14.7-15.8bn) in 2025, compared to EUR12bn for 2024, including proportional agreements, event limits and coverage under Cat XL programmes.
Ankara Insurance’s reinsurance manager Mr Ipek Ibrahimoglu offered this projection as he assessed the impact of reinsurance renewals on the insurance market in 2025, according to a report by Insurance Gazette.
He pointed out that significant improvements have been made in the terms and conditions of proportional agreements in favour of reinsurers, such as an increase in retention rates, a reduction of treaty capacities, increase in exemptions and exceptions, suppression of event limits, reduction in earthquake commission rates and application of minimum fire premiums, etc.
However, significant difficulties have been encountered in capacity for proportional agreements, and some insurance companies have had to turn to quota-par/excess compound structures, while other insurers had to adopt completely non-proportional structures.
The placements of Cat XL programmes have been completed with the help of new capacity entering the market with the expectation of benefiting from the price environment that has developed in favour of reinsurers.
Parametric capacity has been used in the placements of some companies; some insurers have turned to specially arranged excess of loss agreements, and some companies have received specially arranged excess of loss coverage for the unplaced parts of their event limits.
Mr Ibrahimoglu said, “Considering these conditions, I expect an increase in natural disaster coverage in parallel with the increase in liabilities in the Turkish market, and I predict that the total catastrophic coverage of the market will reach EUR14-15bn.”