percent stake held in Turkish composite insurer Axa Oyak Holding
(AOH) by its partner in the joint venture, Turkish conglomerate
Oyak Group, for a cash consideration of $525 million. Established
in February 1999, AOH held a 10 percent share of the overall
Turkish insurance market as at 30 June 2007, according to the
Association of the Insurance and Reinsurance Companies of
General insurance is the dominant source of AOH’s premium income
and in 2006 contributed €507 million ($750 million) or 88 percent
of AOH’s total of €577 million total. AOH’s 71 percent-owned
general insurance unit, Axa Oyak Sigorta, is Turkey’s
second-largest general insurer and held an 11.8 percent market
share in mid-2007. According to Axa, Axa Oyak Sigorta’s premium
income achieved a CAGR of 35 percent between 2002 and 2006, well
above the total general insurance sector’s CAGR of 30
AOH’s wholly owned life insurance unit, Axa Oyak Hayat Sigorta, is
Turkey’s eighth-largest life insurer and held a market share of 5.5
percent in mid-2007. Of total premium income of €70 million in
2006, life insurance accounted for 56 percent, health insurance 38
percent and personal accident insurance 6 percent.
Notably, Axa Oyak Sigorta lagged the Turkish life insurance
sector’s growth rate between 2002 and 2006, achieving a CAGR of 16
percent compared with the sector’s CAGR of 22 percent.
General insurance dominates
Turkey’s insurance market remains dominated by general insurance.
According to reinsurer Swiss Re, out of total premium income of
$6.62 billion in 2006, $5.65 billion (85 percent) was generated by
general insurance (including health insurance) and $972 million (15
percent) by life insurance. Market penetration in Turkey is also
low: 1.4 percent of GDP for general insurance and 0.2 percent of
GDP for life insurance in 2006.