Greece Insurance Report Q4 2011
Includes 3 FREE quarterly updates
The overall insurance sector remains quite resilient in the face of Greece’s alarming financial, economic and political problems.
Life insurance premiums fell by 7.6% in 2010 and could remain under pressure this year.Ultimately, the fortunes of the life segment will be driven by the severity of the recession, which hits voluntary savings hard.
By the end of the forecast period, Greece’s insurance sector will likely remain underdeveloped by most metrics. The market place is characterised by a large number of sub-scale, possibly undercapitalised, local operations. Multinational giants are present but have a smaller market share than in other markets in Central and Eastern Europe.
The relentless wave of bad news surrounding Greece’s economic, financial and political problems has obscured the strengths of its insurance sector. The latest results published by the Hellenic Association of Insurance Companies (EAEE) shows that non-life premiums rose last year by 2.6%. On the basis of the limited data available to us, we strongly suspect that Q111 was a challenging but not disastrous period. The regulatory environment has been strengthened by the Bank of Greece’s taking on of responsibility for overseeing the sector and by the activities of the European Insurance and Occupational Pensions Authority (EIOPA). However, we believe it is likely that the adverse economic and financial conditions will bring about further consolidation in what is a fragmented industry. One likely winner is Interamerican, the local subsidiary of Dutch major Eureko, which is the second largest player in both the life and non-life segments after the National Bank of Greece’s Ethniki Insurance. Interamerican has said it is the best capitalised insurer in Greece.
However, it is not clear that foreigners will automatically see Greece’s life segment as an area of opportunity. In absolute terms, premiums in 2010 were about the same as they were in 2006. Although influenced by currency movements, density in US dollar terms has fallen quite sharply – below US$300 per head in both segments, it is surprisingly low levels for a developed country. Over the last 20 years, when economic and financial conditions have generally been far better than they are now, life insurance has clearly failed to develop as a major vehicle for long-term savings among Greek households. If the country’s financial and economic problems are worse than we anticipate, density and premiums could decline further during the forecast period.
Probably as a result of the non-discretionary nature of many of the lines, such as compulsory motor thirdparty liability (CMTPL) cover, non-life insurance has been quite resilient, with some companies actually reporting double-digit growth in premiums in 2010. However, the latest data suggest that a very gradual increase in non-life penetration, which remains at a low level by most standards, is intact. We see no reason why this trend should change. However, in the event of a brutal contraction in economic activity over the next two years, premiums could fall in absolute terms.
The overall insurance sector remains quite resilient in the face of Greece’s alarming financial, economic and political problems.
Life insurance premiums fell by 7.6% in 2010 and could remain under pressure this year.Ultimately, the fortunes of the life segment will be driven by the severity of the recession, which hits voluntary savings hard.
By the end of the forecast period, Greece’s insurance sector will likely remain underdeveloped by most metrics. The market place is characterised by a large number of sub-scale, possibly undercapitalised, local operations. Multinational giants are present but have a smaller market share than in other markets in Central and Eastern Europe.
The relentless wave of bad news surrounding Greece’s economic, financial and political problems has obscured the strengths of its insurance sector. The latest results published by the Hellenic Association of Insurance Companies (EAEE) shows that non-life premiums rose last year by 2.6%. On the basis of the limited data available to us, we strongly suspect that Q111 was a challenging but not disastrous period. The regulatory environment has been strengthened by the Bank of Greece’s taking on of responsibility for overseeing the sector and by the activities of the European Insurance and Occupational Pensions Authority (EIOPA). However, we believe it is likely that the adverse economic and financial conditions will bring about further consolidation in what is a fragmented industry. One likely winner is Interamerican, the local subsidiary of Dutch major Eureko, which is the second largest player in both the life and non-life segments after the National Bank of Greece’s Ethniki Insurance. Interamerican has said it is the best capitalised insurer in Greece.
However, it is not clear that foreigners will automatically see Greece’s life segment as an area of opportunity. In absolute terms, premiums in 2010 were about the same as they were in 2006. Although influenced by currency movements, density in US dollar terms has fallen quite sharply – below US$300 per head in both segments, it is surprisingly low levels for a developed country. Over the last 20 years, when economic and financial conditions have generally been far better than they are now, life insurance has clearly failed to develop as a major vehicle for long-term savings among Greek households. If the country’s financial and economic problems are worse than we anticipate, density and premiums could decline further during the forecast period.
Probably as a result of the non-discretionary nature of many of the lines, such as compulsory motor thirdparty liability (CMTPL) cover, non-life insurance has been quite resilient, with some companies actually reporting double-digit growth in premiums in 2010. However, the latest data suggest that a very gradual increase in non-life penetration, which remains at a low level by most standards, is intact. We see no reason why this trend should change. However, in the event of a brutal contraction in economic activity over the next two years, premiums could fall in absolute terms.
Contents
Executive SummaryTable: Total Premiums, 2008-2015
Key Insights And Key Risks
SWOT Analysis
Greece Insurance Industry SWOT
Greece Political SWOT
Greece Economic SWOT
Greece Business Environment SWOT
Life
Central And Eastern Europe Life Sector Overview
Table: Central And Eastern Europe’s Life Premiums, 2008-2015 (US$mn)
Greece Life Sector Update
Table: Breakdown Of Life Insurance Premiums And Fees By Line, 2009
Life Industry Forecast Scenario
Table: Life Premiums, 2005-2015
Growth Drivers And Risk Management Projections
Population
Table: Insurance Sector Key Drivers – Demographics, 2008-2015
Non-Life
Central And Eastern Europe Non-Life Sector Overview
Table: Central And Eastern Europe’s Non-Life Premiums, 2008-2015 (US$mn)
Greece Non-Life Sector Update
Table: Breakdown Of Non-Life Insurance Premiums And Fees By Line, 2009
Non-Life Industry Forecast Scenario
Table: Non-Life Premiums, 2008-2015
Growth Drivers And Risk Management Projections
Macroeconomic Outlook
Table: Greece Economic Activity, 2008-2015
Political Stability Outlook
Table: Europe Security Risk Ratings
Healthcare
Epidemiology
Table: Insurance Sector Key Drivers – Disability-Adjusted Life Years 2008-2015
Motor
Table: Insurance Sector Key Drivers – Autos, 2008-2015
Insurance Risk/Reward Ratings
Table: Greece’s Insurance Risk/Reward Ratings
Table: Central And Eastern Europe Insurance Risk/Reward Ratings
Competitive Landscape
Competitive Landscape Analysis
Major Players In Greece’s Insurance Sector
Table: Company Rankings By Gross Premiums And Contract Fees – Non-Life Segment, 2009
Table: Company Rankings By Gross Premiums And Contract Fees – Life Segment, 2009
Company Profiles
Local Company Profiles
ATE Insurance
EFG Eurolife
Ethniki
Groupama Phoenix
Regional Company Profiles
AEGON
Allianz
Aviva
AXA
BNP Paribas Cardif
ERGO
Eureko
Generali
GRAWE
Groupama
HDI-Gerling/ Talanx
ING
KBC Group
MetLife ALICO
Prudential Financial
QBE
RSA
Uniqa
Vienna Insurance Group
Zurich
BMI Methodology
Insurance Risk/Reward Ratings
Table: Insurance Business Environment Indicators And Rationale
Table: Weighting Of Indicators Skip to top