XPRIMM: Which are the main trends encountered on the Turkish market?
Andre EISELE: Turkey it is a very exciting market, with a lot of potential for growth. If you look at the insurance penetration, from a GDP perspective is still very low.

There are, however, a lot of protection gaps. Large infrastructure projects especially government property don't have insurance.

Nevertheless, the industry is tackling one thing at a time and is aiming at increasing the TCIP penetration ad earthquake awareness in general. Therefore, this protection gap is expected to close up.

The downside is that it is a price driven market with heavy competition and it is sometimes hard to differentiate based on value. You don't know when the earthquake will happen, but you do control who you give your money to.

XPRIMM: How is competition seen through the eyes of a global reinsurer?
A.E.: Looking at primary insurance, in a market like Turkey their main goal is market share in the detriment of profitability. This is a common behavior for high growth markets.

We also see a lot of growth from local players, which represents a development of the original market, despite the fact that there are some large global players operating here.

XPRIMM: Is profitability an issue on the Turkish market?
A.E.: Profitability is, for us, the biggest hurdle on the Turkish market. It is hard to find, at the moment lines of business with "big pockets of profitability". Most of the premiums come from motor insurance, which, again, is common for the emerging markets, but it is also a loss producing line of business.

XPRIMM: Are there any specific lines of business that are more attractive?
A.E.: Fire and earthquake segments are profitable, but very much because of the earthquake tariff. Non proportional earthquake business is still quite attractive, while proportional is less attractive because you have to cross subsidize a lot of the fire and the earthquake perils. Engineering is another line where we have seen growth and profitability, but it is an area growing very quickly, attracting a lot of new capacity and, in a market like Turkey where engineering projects develop quickly, it often means for the developers that they have to go into new geographical areas and new types of technology and using some inexperienced contractors. All of these issues do give us some concerns in the long term.

Liability is also a very big growth area, but is not charged accordingly and we need to get the products right.