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GREECE
Premium income figures
In 2005, 85 companies operated in the Greek insurance market: out of the total, 17 companies operated exclusively in life insurance, 55 exclusively in non-life insurance, and 13 were mixed (life and non-life).
Total premium income from direct insurance rose to 3.92 bln. EUR, up 8.27% compared to 2004.
In Non-life insurance, direct insurance premium income rose to 1.988 bln EUR (up 4.91% compared to 2004), while in Life insurance, premiums rose to 1.935 bln EUR (up 11.94% compared to 2004). Graphs 1 and 2 show the breakdown of premium income per insurance branch in Non-Life and Life, respectively.
According to the above figures, we would argue that Life insurance has justifiably been characterised as the driver of Private Insurance in Greece, since with its two-digit growth, has managed to boost the growth of the entire branch.
Top 5 companies in premium income and market share
Ethniki Insurance marked the highest direct insurance premium income (577,763,347.12 EUR of which 304,682,918.79 EUR in Non-Life and 273,080,428.33 EUR in Life insurance), followed by EFG Eurolife SA, with 364,877,926.26 EUR, ALICO AIG Life, with 266,110,515.23 EUR (of which 34,023,738.86 EUR in Non-Life and 232,086,776.37 EUR in Life), Interamerican Life, with 262,678,053.74 EUR and Phoenix Metrolife Emporiki with 208,853,882.13 EUR (of which 134,958,784.19 EUR in Non-Life insurance and 73,895,097.94 EUR in Life insurance).
In 2005, the above companies held the following market shares:
> Non-Life Insurance: Ethniki Insurance: 15.3%, Phoenix Metrolife Emporiki: 6.8%, ALICO AIG Life: 1.7%.
> Life Insurance: EFG Eurolife SA: 18.9%, Ethniki Insurance: 14,1%, Interamerican Life: 13.6%, ALICO AIG Life: 12.0%, Phoenix Metrolife Emporiki: 3.8%.
As to Non-Life Insurance market shares, Ethniki and Phoenix have the lead, followed by Interamerican SA (5.5%), Agrotiki Insurance (5.1%), Intersalonica SA (4.5%).
In Life Insurance, respectively, apart from the above companies, the top five is completed with ING Life SA with a 9.3% share.
Automobile insurance
Automobile insurance could very well be the most discussed branch in the Greek insurance market, and many have called it the apple of discord amongst companies.
In recent years there have been notable market share fluctuations within the branch, the main feature being the shifting of the insured fleet from larger to smaller companies.
Let’s take Ethniki Insurance as a striking example of a large company, which, in Motor Civil Liability is showing the following consistent image, as to its contribution to the annual total premium income in the branch: 2000: 24.0%, 2001: 24.4%, 2002: 22.0%, 2003: 19.5%, 2004: 15.9% and 2005: 15.3%. Other major companies in the Greek insurance market have been marking similar drops in Motor Civil Liability, like Agrotiki Insurance (from 7.2% in 2000 down to 5.3% in 2005; Phoenix Metrolife Emporiki (from 8.9% in 2000 to 5.9% in 2005); Allianz (from 5.3% in 2000 to 2.1% in 2005), etc.
On the very opposite, let’s look at Egnatia Insurance. In 2000 its contribution to the branch was 0.1%. In 2001 it increased its contribution to 0.7%, in 2002 to 2.0%, in 2003 to 3.7%, 2004 to 4.8% and in 2005 to 5.4%.
Other companies have also marked notable increases: Intersalonica (from 4.0% in 2001 to 6.2% in 2005), Diethnis Enossis (from 3.1% in 2000 to 4.6% in 2005), General Union (from 3/0% in 2000 to 5.6% in 2005), Hydrogios (from 2.3% in 2000 to 4.5% in 2005), etc.
Recently, large players in the Greek insurance market (like Ethniki Insurance and Agrotiki Insurance), in their effort to gain back the fleet of insured vehicles that had shifted to companies with cheaper premiums, made rather courageous price drops. Only time will tell whether this effort will have the desired results.
Insurance undertakings mark profits in 2005
Year 2005 appears as a profitable year for Insurance Undertakings. After a year of losses (2004) the net year results (before tax) return to the positive side of the scale. In particular, according to the Insurance Undertakings’ financial information recently published by the Association of Insurance Companies in Greece, profit (before taxes) rose to 124,3 million EUR in 2005, compared to losses of 62.9 million EUR in 2004.
It is indeed very interesting to break the above results down to their individual components, and compare them to those of 2004. The following question now arises: what is the main factor that contributed to the Insurance Undertakings’ increased profitability? the improvement of underwriting results in insurance branches, the increased income from investments or the overhead drop?
Note that Insurance Companies’ balance sheets classify their main operating figures (operating statement) into three large groups: life insurance, motor civil liability insurance and other non-life insurance.
Examination of the life insurance operating statement reveals the following:
> While life insurance income shows slow growth (5.3%), expenses on the other hand increased significantly (18.2%). The result of this is that in life insurance, the underwriting result, albeit positive, appears reduced compared to 2004 (down 18.4%).
> Despite the fact that gross registered premiums rose by 10.2%, ultimately, the Companies’ own retention (excluding reinsurance contribution) on accrued premiums, dropped by 10.4%.
> On the contrary, income from investments rose by 75.2% compared to the previous year, and as a result, it now represents 30% of total life insurance income.
> On the expenses side, own retention (excluding reinsurance contribution) on the insurance indemnity yearly proportion, rose by 11.55%.
> There was also great increase (42.4%) in commissions and relevant expenses, and as a result they account for 23.55% of total expenses.
Examination of the motor civil liability operating statement reveals the following:
> While expenses went up by 9.8%, income marked limited increase (2.75%), and as a result, the branch’s positive underwriting result dropped by half (-57.7% compared to 2004).
> Despite the fact that gross registered premiums rose by 3.1%, ultimately, own retention on accrued premiums, increased by merely 1.2%.
> Income from investments, albeit its noteworthy increase (15%), still accounts for a small part of the branch’s income (just 7%). On the contrary, policy fees (up 5%) account for 18% of the branch’s income.
> On the expenses side, own retention on the insurance indemnity yearly proportion, rose by 5.4%.
> There was also great increase (30.23%) in commissions and relevant expenses, and as a result they account for 20.4% of total expenses.
Finally, examination of the other non-life insurance operating statement reveals the following:
> Other non-life branches still mark a positive underwriting result (up 5% compared to 2004), as there was a major income increase (11.8%) compared to expenses increase (18%).
> There was also great increase in own retention on accrued premiums (12.2%) and policy fees (10.2%).
> Despite its considerable increase (11.2%) income from investments, accounts for just a small part of total income.
> On the other hand, own retention on the insurance indemnity yearly proportion, rose by 11.5%, but is just 49.8% of expenses.
> Commissions and relevant expenses rose significantly (24.7%) and as a result they account for 50% of expenses.
A combination of the above results reveals that the branches’ underwriting results, albeit still positive, have dropped significantly (-14.56%) compared to the previous year.
Total income increased slightly (5.9%), thanks to the considerable increase of income from investments. On the contrary, total expenses increased more (14.7%), both due to increased indemnities (8.8%) and due to increased acquisition expenses (32.8%).
Contrary to the drop in underwriting results, net results (before tax) are positive (while 2004 was at a loss). This is due to a considerable drop (-30%) in overhead in relation to 2004, which led to year profit (before tax) of 124.3 million EUR. If we also take taxation into account (60.3 mil. EUR in 2005) then net results drop to about half (64 mil. EUR).
* The monthly magazine “Asfalistiki Agora” (Insurance Market), has been published in the Greek Insurance Market, since March 1977. It is a financial magazine, which specializes in Insurance, Banking and other issues of concern to the financial world.
“Asfalistiki Agora” is the biggest Insurance magazine in Greece and is trusted by 6.500 subscribers in both Greece and Cyprus. It also circulates in 10.500 issues in news-stands.
The magazine plays an active role in conferences, exhibitions and seminars that are relevant to its subject matter. In addition, “Asfalistiki Agora”, regularly organizes educational and business events, in Athens and other major cities of Greece and Cyprus, which aim in keeping an ongoing communication with its readers and the financial world in general.
The magazine is commercially supported with monthly advertisements by all Insurance companies that are active in Greece, major Banks, Brokers, Software and Car manufacturers, wholesalers of office equipment and many others, and always includes an English Supplement with the most important articles of each issue.
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By courtesy of
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Country Brief |
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> Area: 131,940 sq km
> Land Boundaries: 1,228 km
> Border countries: Albania
282 km, Bulgaria 494 km,
Turkey 206 km,
Macedonia 246 km
> Capital: Athens
> The highest point:
Mount Olympus 2,917 m
> Administrative structure:
51 prefectures (nomoi,
singular - nomos) and
1 autonomous region
> Currency: EURO
> GDP: EUR 178 billion
(2006 est.)
> GDP per capita:
EUR 18,800 (2006 est.)
> Population: 10,688,058
(July 2006 est.)
> Ethnic Groups: Greek 98%, Turkish and other 2%
Note: The Greek Government states there are no ethnic divisions in Greece
> Languages:
Greek 99% (official),
English, French
Source:
CIA - The World Factbook (http://www.cia.gov/cia/
publications/factbook) |
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RESOURCES |
Figure 1
Insurance premium's
share to GDP
Total insurance
Premium - mil. EUR |
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9 MONTH RESULTS 2006 |
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The Ethniki Insurance Group’s nine month 2006 net earned premiums have increased by 24%, compared to the prior year nine month period, amounting to 484.069.000 EUR. Life premium income shows a sharp increase of 51%, mainly attributable to the new bancassurance product Prostheto+, which has been successfully promoted through the National Bank of Greece’s (NBG) branch network. Furthermore, premium income from Individual Life new business has increased by 28%. As a result, Life total premiums represent 52% of total gross premiums, compared to 41% for the respective prior year nine month period. Property & Casualty net earned premiums increased by 5%, mainly due to a 15% increase of the Fire gross written premiums. This increase together with the conversion of the reinsurance treaties from proportional into excess of loss basis has resulted in an exceptional increase of 68% in the Fire net earned premium, absorbing the effect of the 11% Motor Business decrease over the prior year nine month period. Apart from the successful distribution of insurance products through the NBG network (Bancassurance), Ethniki’s sales network has successfully launched the promotion of banking products (Assurebanking). |
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ING GREECE: 7.1% PREMIUM
INCOME INCREASE
IN THE LIFE INSURANCE |
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Total pre-tax profits for ING Greece came up to 52.1 mil. EUR for the first three quarters of 2006, according to the Greek Accounting Plan, including the extraordinary profit from the sale of its holdings in Piraeus Bank.
Premiums from the Life Insurance company were increased by 7.1%, while General insurances was low, recording a decrease of 3.8% compared to last year. Net registered premiums of the two companies came up to 150.8 mil. EUR, recording an increase of 5.8% compared to the same period in 2005. This income didn’t include the extra 22.9 mil. EUR in life insurance premiums that came from ING Piraeus Life Insurance Company S.A.
It is noted that the increase in income from insurance activities came from the Life Insurance policies and Unit Linked type investments. |
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EULER HERMES: 4.9%
INCREASE OF TURNOVER |
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The consolidated turnover of Euler Hermes came up to 1.520 mil. EUR for the first three quarters of 2006, i.e. it recorded an increase of 4.9%. Furthermore, it presented impressive returns in the USA (10.8%) and in the new markets (33.7%), as well as 3% development in the Euro zone. In the Euro zone, Euler Hermes’ turnover increased by 3% thanks to the great increase of activities in France (9.8%), Italy (7.6%), the Benelux countries (4,1%) and the Nordic countries (4.9%). In Germany income was decreased by 1.8% compared to the first nine months of 2005. This decrease is mainly due to the same reinsurance deduction. In the United Kingdom an improvement of the results was recorded during the first three quarters, i.e. a lower decrease (-2.8%) compared to the first half of 2006 (-6.6%). This decrease id mainly due to the pressure exercised on the premiums after a period of decline in claims. In the United States remarkable development is recorded. The turnover appears increased by 10.8% compared to the respective 2005 period. In the new markets (Eastern and Southern Europe, Latin America and Asia) the turnover increase is particularly important and is estimated to over 37 mil. Euro, i.e. 34%. Until September 2006 52% of the total development came from these markets, which now represent approximately 10% of the company’s consolidated turnover. |
AIGAION AIMS
AT THE LONDON MARKET |
| Aigaion Insurance S.A., the first Hellenic insurance company in shit and pleasure boat insurances for the years 2004 and 2005 implements its strategic planning for expansion abroad. The first goal is the London ship insurance market. The company’s application to be allowed to activate on the basis of free provision of services in London has already been submitted. In the meantime, Aigaion has successfully completed its relative contacts with powerful agents of the English Ship Insurance market in order to start its operation immediately as soon as it received the relevant permit. It is worth mentioning that during 2005 Aigaion imported the amount of 10 mil. USD from insurance and reinsurance works abroad, while for 2006 this amount is estimated to increase to 15 mil. USD. |
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