The Turkish insurance market recorded double-digit growth of 22.4% in local currency terms in the 1st to 3rd quarters of 2020. Premium volume rose 17.0% in the non-life sector, while the life sector recorded an even larger increase of 52.4%.
The non-life sector continues to be dominated by the motor lines of business, which contributed 45.8% of the premium volume. Motor third party liability insurance rose 10.5% in the 1st to 3rd quarters of 2020, while motor own damage insurance increased 10.9% compared to the same period in the previous year. The non-motor lines of business grew 23.0%.
The VIG non-life insurance company Ray Sigorta operates in Turkey. With a market share of 1.9%, it achieved 16th place in the Turkish insurance market. In November 2020, VIG Insurance Group signed a share purchase agreement with the Dutch company Aegon N.V. to acquire its companies in Hungary, Poland, Romania and Turkey. The acquisition allows VIG Insurance Group to enter the life insurance business in Turkey. The acquisition is expected to be formally concluded in the 2nd half of 2021. The transaction is subject to the approvals required under supervisory and competition law.
The Georgian insurance market grew in the 1st to 3rd quarters of 2020, recording a 6.5% increase in local currency terms. Both the non-life (+6.2%) and life insurance (+10.2%) lines of business contributed to this growth. In the non-life segment, health insurance, which represents 41.2% of the total premium volume and is one of the most important lines of business in Georgia, recorded an impressive increase of 16.7%. While motor own damage insurance recorded moderate growth of 3.0%, motor third party liability insurance, which only applies to foreign vehicles in Georgia, declined 29.3%. The planned law that would also make motor third party liability insurance compulsory for domestic vehicles was postponed indefinitely. Furthermore, only a fraction of all vehicles in Georgia have motor third party liability insurance coverage. The non-motor lines of business (not including health insurance) grew 5.2% year-on-year.
VIG Insurance Group is represented by two companies in Georgia, GPIH and IRAO. They jointly occupy the second place in the market, with a market share of 26.3%.
Financial performance indicators in the Turkey/Georgia segment
The Turkey/Georgia segment recorded total premiums written of EUR 251.7 million in 2020 (2019: EUR 234.9 million). The increase of 7.1% compared to the previous year was mainly due to double-digit growth in both other property and casualty insurance and health insurance. Net earned premiums were EUR 113.0 million in 2020 (2019: EUR 112.4 million), an increase of 0.6% compared to the previous year.
Result before taxes
Due to the goodwill impairment of EUR 12.5 million performed in Georgia in the first half of 2020, the Turkey/Georgia segment recorded a loss of EUR 0.9 million in 2020 (2019: profit before taxes of EUR 6.7 million).
The combined ratio improved to 95.4% in 2020, primarily as the result of a better claims development in Turkey (2019: 96.5%).