Profitable if you have a bank distribution channel

I had the opportunity to review the 2012 first quarter financial reports of Turkish Insurance Sector.


There are 60 operational life and non-life insurance companies in Turkey. Of these:

  •  35 companies operate in non-life,
  •   9 companies operate in life, and,
  •  16 companies operate in life + pension LoB’s.


The overall sector has made a profit as at end of the first quarter (as bottom line figure). Of the 60 operating companies, 34 have recorded a profit in their balance sheets.


When we look at the total bottom line figures;

  •  The ratio of net profit to total equity in non-life companies: 4.3 %0 (four point three per thousand)
  •  The ratio of net profit to total equity in life companies: 3% (three percent)
  •  The ratio of net profit to total equity in life + non-life companies: 1.6% (one point six pecent)


I tried to figure out what the common characteristics of the profitable companies could be. As far as I know, 20 of the 34 profit-making companies own bank distribution channels. The companies which recorded a first quarter profit and turned the overall sector profitability to positive, other than a few exceptions, are these companies.

Has owning a bank distribution channel become a must for the sector companies to be profitable?

Are the other existing distribution channels too expensive?

Should the sector search for other alternative distribution channels to make profit?

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