Page 13 - Turkinsurance Digital Magazine

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“Preferred business partner for 93

years; Millî Reasürans’’

Millî Reasürans General Manager Fikret Utku Özdemir says “Milli Reasürans, which
took part in the placement of 23 companies that received reinsurance protection on
a divisional basis after the 2022 renewals, retained its market share of 27% with its

leading position in the reinsurance agreement of 18 companies”

How was the year 2021 for Milli While most of the companies operating in the last few months, put heavy pressure on
Reasürans? the sector continued to protect their risk our country’s insurance sector in terms of
portfolios with divestiture-based agree- growth and technical profitability.
In 2021, when we monitored the effects of ments in 2022, our company participated
the Covid-19 pandemic on the global econ- in the program of 6 out of 8 companies Our country’s reinsurance market was also
omy in different dimensions, a recovery was that regulate risk protection on a damage adversely affected by this trend observed
observed in economies with an increase in surplus basis. In terms of the general mar- in the eyes of reinsurers, as the technical
the global vaccination rate and overcoming ket, Milli Reasürans, which took part in the margins of the programs decreased due to
the initial effects of the pandemic. In ad- placement of 23 companies that received the ongoing effect of competition in the in-
dition, the fact that recession concerns at reinsurance protection on a divisional basis surance sector, as well as the effect of ex-
the beginning of the pandemic period were after the 2022 renewals, retained its mar- change rate movements and increased dam-
replaced by the threat of global inflation, ket share of 27% with its leading position age costs due to inflation.
including developed countries, accelerated in the reinsurance agreement of 18 com-
the transition to strict monetary policies. panies. What kind of developments do you
foresee in the sector in 2022, especially
If we look in terms of the insurance and How did the Reinsurance markets in terms of the reinsurance market?
reinsurance sector of Turkey and the world, improve in 2021?
pandemic, as well as the phenomenon of The differentiation trends in reinsurers’ ap-
the global climate crisis and, consequent- From the point of view of pandemic-related proaches to capacity and price in terms of
ly, increasing the frequency and severity of damages, it can be seen that many reinsur- customer, program and branch continued in
natural disasters became one of the most ers face serious damage payouts on a glob- 2022 renewals. In addition, it was observed
important items on the agenda. al scale, and although they are decreasing, that the listing processes were prolonged,
uncertainties about the development of the reinsurers willing to quote decreased,
The premium production of the Turkish Covid-19-related damages continue from these developments caused delays in reinsur-
insurance sector, which maintained its place to place. ance renewals, and the capacities provided
growth dynamics in 2021, amounted to TL decreased compared to 2021 renewals. For
105.3 billion, while it contracted by 6.3% It was observed that the effect of core infla- this reason, the January 2022 renovations
in real terms, despite a nominal growth of tion and social inflation was combined with were completed later than usual. While sig-
27.5%. the demands of reinsurers on the continuity nificant increases were observed in the pric-
of Dec increases in prices in many regions es of damaged programs, price adjustments
Despite the pandemic conditions and fluc- and branches, and this was one of the most were relatively more reasonable in terms of
tuating economic conjuncture with its important factors in reinsurance renewals undamaged programs. Although reinsurers
sound financial strength and technical in- in addition to primary and secondary nat- had a very limited appetite for sub-segments
frastructure, Milli Reasürans completed ural disasters, which are increasing due to of catastrophe programs, annual total pro-
2021 with successful results. The total pre- climate change, which has become a global tections and risk programs, ceding compa-
mium production of our company increased risk in the first place as of the renewal pe- nies had no difficulty in providing protection
by 36% compared to the previous year and riod we have left behind, as well as primary due to the sufficient level of total reinsur-
reached TL 2.483 million, while 74% of and secondary natural disasters. It has also ance capacity. In the coming periods, it will
the total premium was provided from jobs been seen that many reinsurers have com- be important for companies operating in the
accepted from within the country and 26% pletely exited some programs by reducing sector to offer their customers appropriate
from abroad. Our company, whose assets their capacity allocated to some regions and products, innovative channels, the right con-
reached TL 7.183 million and sharehold- programs that they do not find satisfactory ditions and pricing, in order to ensure the
ers’ equity reached TL 3.000 million as of in terms of prices and conditions. In addi- sustainability of the reinsurance guarantee
the end of 2021, closed the year 2021 with tion to the pandemic process, the impact they provide in addition to their growth and
a net profit of TL 549 million. of which continues in October 2021 in our profitability in the current environment. In
country, the natural disasters suffered one this way, on the one hand, the profitability
Milli Reasürans continued to participate in after another throughout the year, the neg- of the reinsurance companies to which the
a significant part of the reinsurance pro- ative impact of competitive conditions on sector and risks are transferred will be in-
grams of insurance companies operating in prices and conditions, the record-breaking creased, and on the other hand, the conti-
the Turkish insurance market in 2021, the increase in inflation, and the uncertainty nuity of global reinsurance capacity will be
vast majority of which are foreign-owned. caused by the exchange rate fluctuations in ensured.