Turkey/Georgia

Turkey

The Turkish insurance market grew 14.7% year-on-year in local currency terms in the first three quarters. The Turkish insurance market continues to be dominated by the non-life sector, which represents around 85% of the total market. While the non-motor lines of business rose by 21.5% compared to the same period in the previous year, the motor lines of business showed a mixed picture, with motor third party liability decreasing 3.7%, and motor own damage increasing 10.3%. The life sector recorded an increase of 49.2%.

More than 60 insurance companies were operating in the Turkish insurance market as of 30 September 2017. The non-life insurance company belonging to the Group, Ray Sigorta, holds 18th place in the Turkish insurance market with a market share of 1.5%.

Georgia

The Georgian insurance market is dominated by health insurance, which represents around 47% of total premium volume. Total premium volume grew 10% year-on-year in local currency terms in the first three quarters. The non-life sector as a whole, including health insurance, grew significantly at a rate of 10.9% compared to the same period in the previous year. This increase also reflects the strong growth recorded in the motor lines of business (motor third party liability +17.5%, motor own damage +21.7%). At 2.4% of total premium volume, motor third party liability insurance has played a minor role to date. The local insurance supervisory authority, however, is currently preparing a law to make motor third party liability insurance mandatory. Only foreign vehicles will be affected at the start, domestic vehicles will be included later. Life insurance premiums declined 14.3% in the 1st to 3rd quarter of 2017.

Vienna Insurance Group is represented by two companies in Georgia: GPIH and IRAO. Their combined market share of 30.0% puts them in second place in the Georgian insurance market. A total of 16 insurers operate in the market.

Business development in the Turkey/Georgia segment in 2017

Premium development

PREMIUMS by line of business

Turkey/Georgia – Premiums by line of business (ring chart)

Values for 2016 in parentheses

VIG recorded total premiums written of EUR 207.8 million in the Turkey/Georgia segment in 2017 (2016: EUR 208.7 million), representing a decrease of 0.4% compared to the previous year. This change was due to negative currency effects, especially in Turkey. When adjusted for these effects, however, the Turkey/Georgia segment recorded an increase of 19.6%. Net earned premiums were EUR 101.6 million in 2017 (2016: EUR 102.1 million), a decrease of 0.5% compared to the previous year.

Expenses for claims and insurance benefits

Expenses for claims and insurance benefits less reinsurance were EUR 79.8 million in 2017 (2016: EUR 76.9 million). This corresponds to a year-on-year increase of 3.8% in expenses for claims and insurance benefits (less reinsurance), which was primarily the result of a higher volume of health insurance business in Georgia.

Acquisition and administrative expenses

Acquisition and administrative expenses in the Turkey/Georgia segment decreased from EUR 22.6 million in

2016 to EUR 19.7 million in 2017. This corresponds to a decrease of 12.8% compared to the previous year, mainly due to an exit from a local bank cooperation in Georgia.

Result before taxes

At EUR 9.4 million, the result before taxes was close to the level in the previous year (2016: EUR 9.0 million).

Combined Ratio

The combined ratio rose to 96.1% in 2017 (2016: 95.7%).

Vienna Insurance Group in the Turkey/Georgia segment

in EUR millions

2017

2016

2015

2014

Premiums written

207.8

208.7

182.3

170.4

Motor own damage insurance (Casco)

33.9

33.2

36.5

33.7

Motor third party liability insurance

45.1

54.4

34.8

27.3

Other property and casualty insurance

99.5

99.4

90.3

87.5

Life insurance – regular premium

0.0

0.0

0.0

0.0

Life insurance – single premium

0.0

0.0

0.0

0.0

Health insurance

29.3

21.8

20.8

21.9

Result before taxes

9.4

9.0

3.2

5.7