The Greek private insurance market is at a crossroads. The road to the sector’s growth lies ahead, with targets set on converging with European levels of market penetration while leveraging a market that is still widely uninsured. Seizing the right path will be a matter of investments, products, increased personal incomes, and political will.
According to the Hellenic Association of Insurance Companies (HAIC) and the Foundation for Economic & Industrial Research (IOBE), the rate of premiums/gross domestic product (GDP) in Greece stood at 2.2% until 2017-2018. On the flip side, the average rate in Europe during the same period was more than three times higher, reaching 7.5%.
The decade-long crisis that decimated a quarter of Greece’s economic output also took its toll on the Greek insurance market, with the level of premiums declining 23% since 2009, according to HAIC data.
Much like Greece’s banking sector, the private insurance space has undergone a significant amount of consolidation, with 53 companies remaining, down from approximately 100 in 2003. Most of the players that vanished were either too small or simply failed to comply with incoming regulatory requirements.
However, during the economic crunch, insurance companies within the Hellenic market –both local and foreign– not only showed great resilience when compared with other sectors of the economy (such as the banking industry), they successfully faced up to a decline in the incomes of their clients as well as to what was considered, by some, hostile behaviour by the previous Syriza-led government.
“The domestic insurance industry has proven to be one of the most resilient sectors during the economic downturn in terms of profits and economic value generated,” says Nicholas Kakatsis, General Manager and Deputy CEO of European Union Minettas Insurances. He believes there is one key takeaway from the positive performance of the insurance industry: “The inherent flexibility of the business model of insurers that allows them to maintain profitability levels, even under stressed economic conditions, as long as fixed costs are managed successfully.”